Equity Trading

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An investor believes that the stock of a large gas and oil company is likely to lose a lot of value in the near term and decides to take out a short position in the stock. The investor sells for USD 450 per share and the price drops to USD 380 at the
Unlimited
1 of 4
The writer of an equity option has the obligation to sell a stock at a specified price in future. What type of option position is this?
Short call
2 of 4
An investor takes a long position in a stock at a price of USD 250 and does not buy on margin. The stock price rises to USD 620. The initial margin requirement of the investor's broker is 50%. What is the investor's potential loss on the trade?
USD 250
3 of 4
An investor buys USD 80,000 of stock on a 50% initial margin with a 30% maintenance margin requirement. Shortly after buying the stock, the value of the investment falls from USD 80,000 to USD 66,000. At a stock value of USD 66,000, a margin call
USD 19,800
4 of 4

Other cards in this set

Card 2

Front

The writer of an equity option has the obligation to sell a stock at a specified price in future. What type of option position is this?

Back

Short call

Card 3

Front

An investor takes a long position in a stock at a price of USD 250 and does not buy on margin. The stock price rises to USD 620. The initial margin requirement of the investor's broker is 50%. What is the investor's potential loss on the trade?

Back

Preview of the front of card 3

Card 4

Front

An investor buys USD 80,000 of stock on a 50% initial margin with a 30% maintenance margin requirement. Shortly after buying the stock, the value of the investment falls from USD 80,000 to USD 66,000. At a stock value of USD 66,000, a margin call

Back

Preview of the front of card 4

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