In a bearish market, how can you hedge your long position in stocks?
- In a bearish market, how can you hedge your long position in stocks?
Homework Answers
As given the case of bearish market in which stock prices fall, it is better to hedge one's long position in stocks. This can be done using put option. Put option gives the owner a right to sell his stocks at a pre specified price. Thus to hedge his/her position one can purchase short and long-term puts of the major indices so that if in any case the price of his long postioned stock falls one can hedge them by selling the put options.
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In a bearish market, how can you hedge your long position in
stocks?
Q3) If you have a long position in a foreign currency, you can hedge with A)...
Q3) If you have a long position in a foreign currency, you can hedge with A) a short position in a currency forward contract. B) borrowing in the domestic and foreign money markets. C) a short position in an exchange-traded futures option. D) a short position in foreign currency warrants Q4) If you owe a foreign currency denominated debt, you can hedge with A) a long position in a currency forward contract, or buying the foreign currency today and investing...
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You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How muc...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...
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1. You are bearish on Telecom stock and decide to sell short 100 shares at the...
1. You are bearish on Telecom stock and decide to sell short 100 shares at the current market price of $50 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...
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You are bearish on Telecom and decide to sell short 280 shares at the current market price of $100 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? (Round your answer to the nearest whole number) or to be put into b. How high can the price of the stock go before you get a margin call if...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $49 per share a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Enter your answer without a dollar sign Your Answer: Answer Question 5 (1 point) continued from the previous question) How high can the price of the stock go before you get...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $36 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? X Answer is complete but not entirely correct. Initial margin $ 5,000 b. How high can the price of the stock go before you get a margin call if the...
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