To sell short a listed stock in a margin account requires a deposit of: A. 25% of the price of the transaction B. 50% of the price of the transaction C. 25% of the closing price of the security that day D. 50% of the closing price of the security that day

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Business

Nico Hull

18 October, 09:21

To sell short a listed stock in a margin account requires a deposit of: A. 25% of the price of the transaction B. 50% of the price of the transaction C. 25% of the closing price of the security that day D. 50% of the closing price of the security that day

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Answers (1)

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Edgar Sandoval · Answer 1

50% of the price of the transaction.

Explanation:

According to regulation T there needs to be a deposit of 50% of the purchase amount. The closing amount has no effect on the deposit required.

So for example if a listed stock in margin account is to be sold and transaction amount is $5,000, there needs to be a deposit of $2,500.