Question: Assume Janet doesn't have any additional capital so that when her broker issues a margin call, she is forced to close out the short operation.
Assume Janet doesn't have any additional capital so that when her broker issues a margin call, she is forced to close out the short operation. When closing out a short operation, the short seller needs to buy back the stock she shorted from the market and return it to her broker (because the short seller borrowed it from the broker when she initiated the operation).
Now imagine the same scenario (from your perspective) in part 1 of the question. The current price of stock ABC is $170 and you buy 300 shares. Knowing the existence of Janet's short position, what's the price at which stock ABC trades after all possible trades execute? (Fill in a number with 2 decimal points.)
Hint: If your trade triggers the margin call for Janet, she will be forced to close out her short position.
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