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Suppose Citron Capital build a short position of 1,000,000 shares of GameStop when the stock price was $40. Citron expected that the share of GameStop
Suppose Citron Capital build a short position of 1,000,000 shares of GameStop when the stock price was $40. Citron expected that the share of GameStop would drop to $10 dollar per share at the end of Q1 2021. Suppose that the stock price moved as predicted by Citron, what is the profit of short selling (ignoring all costs of short selling)? Question 4.2 Suppose Citron needed to post collateral whose value equal to 102% of the borrowed position. How much collateral Citron needed to post on 1/27/2021, when the market price of the stock was $347.52? Question 4.3 Suppose the lending fee of GameStop was $0.058 per share per calendar day during Q1 2021. How much was the lending cost for Citron in Q12021 ? Question 4.4 The stock price of GameStop closed at $194.46 on 3/30/2021. How much would Citron lose if Citron closed its entire short position on 3/30/2021(ignoring all costs of short selling)
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