Assume you shorted 100 shares of a stock at $37. Commissions are $25 per trade. The...

Assume you shorted 100 shares of a stock at $37. Commissions are $25 per trade. The company also paid a $.50 per share dividend. What is your dollar profit or loss if you close out the position when the stock trades at $34 per share.

Expert Solution

CALCULATION OF THE GAIN OR LOSS ON SALE OF SHARES

Selling price or Short Price (100 Shares X $ 37) =	$ 3,700
Less: Close out possition price (100 Shares X $ 34)=	$ 3,400
Less: Trade Commission ($ 25 X 2 Trade(1 Buy and 1 Sale)=	$ 50
Gain on on Transaction =	$ 250

Answer = Gain on Trade = $ 250


Note: This is a sale possittion so Dividend paid is not taken in considaration received,

jeff jeffy answered 2 years ago

Suppose you bought 100 shares of stock at an initial price of $37 per share. The...

Suppose you bought 100 shares of stock at an initial price of $37 per share. The stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41. (1) What is your total dollar return on this investment? (2) What is the percentage return on the investment?

A few weeks ago, you shorted sell 100 shares of Gemini Inc. at $60 per share....

A few weeks ago, you shorted sell 100 shares of Gemini Inc. at $60 per share. Your dealer requires 50% initial margin with 25% maintenance margin. Today, the price of the stock is $71 per share. Given this scenario: (1) What is your Total Account Value today (i.e how much total cash and value of the shares are in your account) and (2) What is your Total dollar gain/loss on the shorted shares (ignoring fees, charges and margin) A. (1)...

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the...

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. Round your answer to the nearest cent (2 decimal places).

1) Assume you buy 100 shares of stock at $40 per share on margin. The initial...

1) Assume you buy 100 shares of stock at $40 per share on margin. The initial margin is 50%. If the price rises to $55 per share, what is your percentage gain on the initial equity?

You buy a call with a strike price of $100 on stock that you have shorted...

You buy a call with a strike price of $100 on stock that you have shorted at $100 (this is a “protective call”). What are the expiration date profits to this position for stock prices of $90, $95, $100, $105, and $110 if the call premium is $6.50? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your call profit and...

Assume you sold short 100 shares of common stock at $70 per share. The initial margin...

Assume you sold short 100 shares of common stock at $70 per share. The initial margin is 30%. What would be the maintenance margin if a margin call is made at a stock price of $85? A) 40.5% B) 20.5% C) 35.5% D) 23.5% E) none of the above 53. You sold short 100 shares of common stock at $45 per share. The initial margin is 30%. At what stock price would you receive...

You purchased 100 shares of Express Scripts common stock on margin at $70.38 per share. Assume...

You purchased 100 shares of Express Scripts common stock on margin at $70.38 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $71.75. If the broker’s call loan rate is 2.00%, what is your return on equity? Can I please get a step by step breakdown so that I can better understand the process involved? Thank you.

1. Assume you sold short 100 shares of common stock at $50 per share. The initial...

1. Assume you sold short 100 shares of common stock at $50 per share. The initial margin is 60%. What would be the maintenance margin if a margin call is made at a stock price of $60? 2. Assume you sell short 100 shares of common stock at $45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $40/share? The stock paid no dividends during the period, and you...

assume you sell short 100 shares of common stock at 50 per share, with initial margin...

assume you sell short 100 shares of common stock at 50 per share, with initial margin at 50%, at what price you will receive a margin call from your broker ( assuming maintenance margin of 30%) answers- 42.26, 57.69, 62.00, 24.44 What is your rate of return in previous problem if you purchase the stock at $40 per share? answers- 40%, 60%, 25%, 18%

a. Assume that you would like to buy 100 shares of a stock that is currently...

a. Assume that you would like to buy 100 shares of a stock that is currently priced at $ 70. The initial margin is 75% and maintenance margin is 35%. How much would the total purchase amount to in dollars. How much in total cash of your own do you need in dollars in this example? How much will you be able to borrow in dollars in this example? b. Show your total dollar amount of investment and your results...

Question