Answered

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you have a 50% margin account, and short-sell one share of a stock currently trading at $100. what is your maximum profit? $50 $100 $200 unlimited

Sagot :

Answer:  Your maximum profit is $50.

Margin account

Brokerage companies provide accounts called margin accounts that let customers borrow money to purchase securities.

Explanation:

This is because when you short-sell a stock, you borrow it from your broker and sell it at the current price of $100. Then, you must buy it back later at whatever the price is and return it to the broker. Since you have a 50% margin account, you are only responsible for half of the total amount, which is $50. Therefore, your maximum profit is $50.

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