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Posted by on Tuesday, September 9, 2008 at 7:06pm.

Suppose that you sell short 100 shares, now selling at $70 per share.

What is your maximum possible loss?

What happens to the maximum loss if you simultaneously place a stop buy order at $78?

  • Finance - , Monday, July 5, 2010 at 12:59am

    The Max possible loss will be increasingly unbounded if P --> infinite.

    If you simultaneously place a stop-buy order at $78, the maximum possible loss per share is $8.

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