A Case of The Shorts
You shorted 5,000 shares of a particular stock at a price of $30 per share. The initial margin is 50 percent, and the maintenance margin is 40 percent. What does your account balance sheet look like following the short?
Following the short, your account becomes:
|
Assets |
Liabilities and Account Equity |
||
|
Proceeds from sale |
$150,000 |
Short position |
$150,000 |
|
Initial margin deposit |
75,000 |
Account equity |
75,000 |
|
Total |
$225,000 |
Total |
$225,000 |
Notice that you shorted $150,000 worth of stock, so, with a 50 percent margin requirement, you deposited $75,000.