I provide short some shares ($Y) at a outside edge beside interest, and buy rear legs at $Z Is the interest cal by % of Z/Y?
This is in connection with nouns: short sale. Suppose I deal in short some shares at $50 per share at 55% fringe requirement near a 10% interest on the money borrowed.Then one yr then, I deal in at $30. Disregarding commission costs, how much do is e rate of return?
Answers:
The interest rate would be base on the price you are selling short at. Remember, in selling short you are borrowing the stock, after selling it. As in any borrowing, the price you borrow at is the determining factor. What the stock does afterwards is irrelevant.
In your example, your border and interest is base on $50, your untested selling short price.
If your stock go against your care border aim, you would hold to put up secondary money when you grasp your broker’s edge phone call
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Answers:
The interest rate would be base on the price you are selling short at. Remember, in selling short you are borrowing the stock, after selling it. As in any borrowing, the price you borrow at is the determining factor. What the stock does afterwards is irrelevant.
In your example, your border and interest is base on $50, your untested selling short price.
If your stock go against your care border aim, you would hold to put up secondary money when you grasp your broker’s edge phone call