Assume you sell short 100 shares of Shell Corp. at $100 per share, with initial margin...

Assume you sell short 100 shares of Shell Corp. at $100 per share, with initial margin at 45%. The minimum margin requirement is 30%. The stock will pay no dividends during the period, and you will not remove any money from the account before making the offsetting transaction.

At what price would you face a margin call?

If the price is $110 at the end of the period, what is your margin ratio at that point?

Expert Solution

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jeff jeffy answered 1 year ago

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