Question

Continued from Q24, what shall be your margin account balance at the end of 9/26(Assuming that you'll not withdraw money from your margin account, and you do not earn interest on your margin account)? (Points : 3.5)

   -On 9/26, you received a margin call from the broker to deposit $625 to bring up your margin balance on 9/26 back to $2,875.
   -On 9/26, you received a margin call from the broker to deposit $1,875 to bring up your margin balance on 9/26 back to $2,875.
- On 9/26, you received a margin call from the broker to deposit $1,250 to bring up your margin balance on 9/26 back to $2,875.
- On 9/26, you received a margin call from the broker to deposit $2,500 to bring up your margin balance on 9/26 back to $2,875.
- On 9/26, you did not receive a margin call from the broker to require additional deposit, and your margin balance on 9/26 back to $2,250.

Answer 1

We see a trend in the trading, and we can find as below:

1. Initial balance = $2250

2. Balance after first trading of $ 1875 = $1000( 2875- 1875)

3. Balance after second trading of $ 1250= $ 1625( 2875- 1250)

4. Balance after third trading of $ 2500 = $375( 2875- 2500)

And , if we see a) 2250- 1000= 1250 b) 1000- 1625= 625 c) 1625- 375= 1250 d) 375- trade = 625

Hence, day end trade = $1000

So, margin account balance at the end of the day is $ 1875 ( 2875- 1000)