You have a short position of 1000 shares of stock at $80 per share. The price has decreased to $70. The forecasts from

Question

You have a short position of 1000 shares of stock at $80 per share. The price has decreased to $70. The forecasts from stock analysts are mixed. If you would like to cover your short position if the stock increases as much as $1 but stay put if the price continues going down. What could you do? A. Sell limit order at $71. B. Buy limit order at $71. C. Sell stop order at $71. D.Buy stop order at $71. 1.4 Suppose you have a stop-loss order to sell some shares of stock that you own. Currently, the stock price is $50, and you set the stop price to be $45. How much will you receive per share if the price decreases to $42? A. $3. B. $5. C. $8. D.Cannot tell with the given information. 2.2 Supose you want to purchase a stock at $30 per share, but this stock is currently trading at $32. What kind(s) of order would you submit? A. Limit buy order. B. Market order. C. Stop-loss order. D.Market-to-limit order.

Help In Homework · Accepted Answer

1.3 D.Buy stop order at $71 As we shorted the stock, we need to cover the short position by buying the stock. We need to buy it once it increase by $1. So, the order should be a buy with a stop. So, Buy Stop order at $71. 1.4 D.Cannot tell with the given information Given that we kept the stop at $45. And the price is $42 now. The order could have executed anywhere between $42 and $45, depending on the buy ask spread. So, we cannot tell with the given information. 1.5 A. Limit buy order We are placing an order to purchase the stock at $30, when the current price is $32. As we are keeping the order at a lower price to buy, it is a Limit buy order.

Why Choose Us?

0% AI Guarantee

24/7 Support

Plagiarism Free

Expert Tutors

100% Confidential

On-Time Delivery

You have a short position of 1000 shares of stock at $80 per share

Expert Solution

Archived Solution