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You are bearish on Commodore stock and decide to sell short 100 shares at the current...

You are bearish on Commodore stock and decide to sell short 100 shares at the current market price of $60 per share. (the stock does not expect dividends so ignore any expected dividend)

a) How much cash must you put into your brokerage account if the initial margin requirement is 50% of the value of the short position?

b) If you are wrong and the stock price increases, at what price would you receive a margin call from your broker if the maintenance margin is 30% of the value of the short position?

Please show all work.

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jeff jeffy answered 4 months ago
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