Question
You short sell 2,600 shares of TID at a price of $49 per share. Your initial margin is 30% and the maintenance margin is 25%.
You short sell 2,600 shares of TID at a price of $49 per share. Your initial margin is 30% and the maintenance margin is 25%. Suppose that immediately after buying the 2,600 shares of TID the price jumps up to $55.55, triggering a margin call. You want to keep your short position open, but you dont want any more money to come out of your pocket, so you will use the money in the margin account to cover part of your position in order to get back up to the initial margin. What is the minimum number of shares you need to cover (buy back to close the short position) in order to keep a short position in TID? Assume that you can cover the shares you shorted for $55.55. Please select the answer closest to the correct answer.
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