Question

You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What is your maximum possible gain, ignoring transactions cost

Answer 1

$4,400

Step-by-step explanation:

Calculation for the maximum possible gain, ignoring transactions cost

Using this formula

Maximum possible gain = Sale proceeds - Cost of purchasing the share

Let plug in the formula

Maximum possible gain = (100 shares *$44 per shares)- (100 shares *0) = 14000

Maximum possible gain=$4,400-0

Maximum possible gain=$4,400

Therefore the maximum possible gain, ignoring transactions cost will be $4,400