You have decided to short 125 shares of Shake Shack, which is currently trading for $160 per share. Assume your account already has $10,000 in T-bills which you can use as collateral. For short sales, your broker requires an initial margin of 50% and a maintenance margin of 30% and you must also set aside 100% of the cash proceeds as collateral.

By how much could the stock price increase before you receive a margin call?

Answer rating: 100% (QA)

To calculate the price at which a margin call would be triggered we need to calculate the minimum ma... View the full answer