you are bearish on telecom and decide to sell short 100 shares at the current market price of $50 per share. how high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the short positionn?
In this question , why is maintenance ratio calculated with ((initial margin+stocks posessing)-p*q)/ p*Q?
what I knew was that maintenance ratio is equity/ share so it has to be (p*q- loan)/p*q
I thought it should be equity/ share , but why does this question uses assets in the ratio?
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