An investor sold short 1,500 MNO common shares at $12.75 pershare. What is the outcome if the investorcovers the short position at $10.15 per share?
A loss of $3,000
A loss of $2,382
A profit of $3,900
A profit of $2,382
Profit from a short sale is calculated as the difference between the selling price and the covering price, multiplied by the number of shares:
Profit=(12.75−10.15)×1,500=2.60×1,500=3,900\text{Profit} = (12.75 - 10.15) \times 1,500 = 2.60 \times 1,500 = 3,900Profit=(12.75−10.15)×1,500=2.60×1,500=3,900
References:Volume 1, Chapter 9 ("Short Selling").
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