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Six months ago, you decided Ford’s shares are currently overvalued. At the time, Ford’s shares were...

Six months ago, you decided Ford’s shares are currently overvalued. At the time, Ford’s shares were trading at $9.96/share. You decide to short 200 shares of Ford. At the end of that six-month period (i.e. today), Ford is trading at $9.55 per share. Ford also paid a dividend of $0.25 per share. If you were to close out (cover) your short position today, how much money would you have made from the trade. Please round your answer to the closest hundredth and do not include a dollar sign (ex: 24.88).

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Answer #1

Profit from the trade = (Selling Price - Buying Price - Dividend Lost)*Number of shares

= (9.96 - 9.55 - 0.25)*200

= $32

i.e. 32

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