Last year you sold short 400 shares of stock at $90 per share. Six months later the stock had fallen to $45 per share and you bought the 400 shares. Over the six month period the company paid out two dividends of $1.50 per share. Your total commission cost for the trades was $125.

-Determine your net profit or loss for these transactions.

1) When buying a stock in the traditional way there is an old Wall Street saying that you should always first Buy Low, then Sell high. How is that saying amended for a short sale?

2) What is meant by the term a short squeeze?

3)Why is it considered riskier to sell short than to buy a stock?