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Homework answers / question archive / As an investor in the financial market, you have two situations that you can make a profit out of
As an investor in the financial market, you have two situations that you can make a profit out of. Currently, the stock price is $30 per share. Identify the best strategy to follow for each case. Draw the balance sheet for both cases before and after you take a position (Assume 100 shares for each case) First: When you expect that the price of BETA will increase in 30 days to $40. The broker's initial margin requirement is 60% of the value of the position. The maintenance margin is 20%. What will be your strategy and your position? How much will you lose or gain if you closed your position after 30 days? Do you receive a call if the price will be $15 per share? What should be the price of the stock for you to receive a margin call?
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