How high can bhp price increase before you get margin call

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Reference no: EM133227636

Suppose you are bearish on BHP and decide to sell short 100 shares at the current market price of $40 per share. If the broker's initial margin requirement is 60% of the value of the short position and the maintenance margin is 30%.

1. If the price of BHP immediately changes to $55, will you receive a marginal call? If so, please calculate the additional margin you need to deposit in the account

2. How high can BHP's price increase before you get a margin call?

Reference no: EM133227636

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