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Discuss risks of shorting shares

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Reference no: EM132711562

Tina sells short 1,000 shares of XYZ at $10 and immediately buys 10 calls with a strike price of $11.50 at a cost of $0.25.

-What type of account would Tina need to have in order to make this type of trade?

-What does Tina believe the shares of XYZ are going to do?

-Why does she buy the calls?

-Discuss 2 risks of shorting shares.

-What is her total profit/loss if XYZ shares hit $12

-What is her total profit/loss if XYZ share hit $8

Reference no: EM132711562

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