Finance

posted by .

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 -

    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.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    if you bought 12,000 shares of stock at .50 per share and the stock falls to .25 per share how many additional shares would you have to buy to get your bottom line down to .25
  2. math

    suppose walmart stock is selling at $59 a share and mattel stock is selling at $28 a share. Amy waller has a maximum of $6000 to invest. she wishes to purchase four times as many shares of walmart as of mattel. only whole shares of …
  3. math

    suppose walmart stok is selling at 59 dollars a share and mattel stock is selling at 28 a share. amy waller has a maximum of 6000 dollars to invest. she wishes to purchase four times as many shares of walmart as of mattel. only whole …
  4. Finance

    A U.S. firm wants to raise $15 million by selling 1 million shares at a net price of $15. We know that some say that firms "leave money on the table" because of the phenomonon of underpricing. Using the average amount of underpricing …
  5. Finance

    You decide to sell short 100 shares of Charlotte Farms when it is selling at its yearly high of $56. Your broker tells you that your margin requirement is 45% and that the commission on the purchase is $155. While you are short the …
  6. finance

    11-10. A U.S. firm wants to raise $15 million by selling 1 million shares at a net price of $15. We know that some say that firms “leave money on the table” because of the phenomenon of underpricing. a. Using the average amount …
  7. Economics and Statistics

    A stockbroker placed the following order for a customer: • 50 shares of Kaiser Aluminum preferred at $100 a share • 100 shares of GTE preferred at $27.20 a share • 20 shares of Boston Edison preferred at $12.20 a share What is …
  8. Statistics

    A stockbroker placed the following order for a customer: • 50 shares of Kaiser Aluminum preferred at $100 a share • 100 shares of GTE preferred at $27.20 a share • 20 shares of Boston Edison preferred at $12.20 a share What is …
  9. math

    I instruct my stockbroker to buy 1000 shares at $1.82 each. I told him to sell at a price that guaranteed me 15% profit, or alternatively at a price tat limited my loss to 5%. At what prices should he sell the shares?
  10. Economics

    You buy 100 shares of stock at $4.00 per share. You receive one dividend of 10 cents per share. You sell the stock 1 year later for $5.50 per share. The fee for selling the stock is $15.00. What is the total profit you made on the …

More Similar Questions