Question

on January 1, you open a brokerage account and sell short 750 shares of Tesla, inc...

on January 1, you open a brokerage account and sell short 750 shares of Tesla, inc at 110.00 per share. The initial margin requirement is 60.00% and the maintenance margin requirement is 30.00%. you will get a margin call at what price if the maintenance margin requirement is 30.00% of the value of the short position?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

meaning of short sell--

exmple if share has value 100 if price fall below 100 you will get diffrence balance i,e curret price is 95

you will get 5.

meanig of margin--

amount required for execution of contract wihout.

meaning of maintance margin--

it'is minimun amount are kept as margin if amount fall bellow maintance margin,than broker will call you for diffrence balance if you want to continue contract.

total short sell amount=750*110/100

=82500

inital margin=82500*60/100

=49500

maintance margin=82500*30/100 (question given on value of short position)

=24750 total

maintance margin =24750/750 share

=33

if price moves more than 143(110+33) call come from broker i.e margin call.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are bearish on Telecom stock and decide to sell short 400 shares at the current...
You are bearish on Telecom stock and decide to sell short 400 shares at the current market price of $30 per share. How much cash must you put into your brokerage account if the broker’s initial margin requirement is 30% of the value of the short position? How high can the price of the stock go before you get a margin call if the maintenance margin is 35% of the value of the short position?
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $41 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?
You are bearish on Telecom and decide to sell short 240 shares at the current market...
You are bearish on Telecom and decide to sell short 240 shares at the current market price of $85 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? (Round your answer to the nearest whole dollar.) Cash or securities to be put into brokerage account : ______________ b. How high can the price of the stock go before...
16) You are bearish on Telecom and decide to sell short 100 shares at the current...
16) You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?...
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round...
You are bearish on IBM and decide to sell short 100 shares at the current market...
You are bearish on IBM and decide to sell short 100 shares at the current market price of $100 per share. The broker's initial margin requirement is 50% of the value of the short position. The maintenance margin is 20% of the value of the short position. How high can the price of the stock go before you get a margin call?
3.) Short Sale with Margin You open a brokerage account and plan to short 100 shares...
3.) Short Sale with Margin You open a brokerage account and plan to short 100 shares at $1,641.00/share. 1. How much equity (cash) must you deposit in your account in order to execute this trade (assume a 50% initial margin requirement). 2. If the required margin is 25% at what price will you receive a margin call? 3. If the stock price falls to $1400 and you cover your short how much did you make on the trade in dollar...
I open a brokerage account and deposit $10000 into it. I buy 150 shares of AAPL...
I open a brokerage account and deposit $10000 into it. I buy 150 shares of AAPL at $100 per share. What is my margin right after I open the position? Assume the maintenance requirement for this position is 40% If the price of AAPL were to suddenly fall to $50 per share, would my broker issue a margin call? If so, how much more money would I have to deposit into my account so my margin is once 40%? If...
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%....
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%. Maintenance margin for short sale of stock with price > $16.75 is 30% of market (or position) value QUESTIONS: 1. What is the price for margin call?   2. What is the new market value of the position?(Note: we haven’t deposited any add’l cash yet)
1) You sell short 200 shares of Doggie Treats Inc. that are currently selling at $25...
1) You sell short 200 shares of Doggie Treats Inc. that are currently selling at $25 per share. You post the 50% margin required on the short sale. If your broker requires a 30% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account, and the firm does not pay any dividends.) A. $32.25 B. $31.50 C. $28.85 D. $35.71 2) You purchased 250 shares of common...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT