In: Finance
Can someone show me how to break this down by steps please and thank you.
You sell short 200 shares of a stock at $95 on a 60% initial margin requirement with a 30% maintenance margin. In 3 months, the stock is $79. What is your margin at this time? When would a margin call occur? If you cover your position when the stock is $79, what would be your HPR? Assume you did the same trade as before but that, after 3 months, the stock is at $108. If you cover your position when the stock goes to $108, what would be your HPR?