Ask Question
23 November, 01:53

You own 500 shares of Great, Inc., stock. It is currently priced at $50. You are going on vacation and you realize that the company will be reporting earnings while you are away. To protect yourself against a rapid drop in the price, you place a stop-limit order to sell 500 shares at $40. It turns out the earnings report was not so good and the stock price fell to $30 right after the announcement. It did, however, bounce back, and by the end of the day it was back to $42. What happened in your account

+5
Answers (1)
  1. 23 November, 05:03
    0
    Reduced by $4000

    Explanation:

    Your account will be reduced by $4000 this is how it will happen

    You sell at $40 and again bought it back at $40

    And at the end of the day, it was back to $42

    You will lose value as it was $50 before and $42 at the end of the day

    Difference = $50 - $42 = $8

    loss = $8 x 500 = $4,000

    NOTE: However number of shares remain same.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You own 500 shares of Great, Inc., stock. It is currently priced at $50. You are going on vacation and you realize that the company will be ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers