I'm trying to calculate the gain on a short position. I think I have the correct calculation, I just want to make sure I am correct. Here's the data:
1. Entered position with stock price at $28.07.
2. Closed position with stock price at $7.06.
Assume no dividends and a margin requirement of 50%, the formula is:
(Stock Sale Price - Stock Purchase Price) / Initial Margin Req. so...
($28.07 - $7.06) / ($28.07 / 2) = $21.01 / $14.035 = about 150% gain?


This is probably wrong. Usually the margin requirement is stated as something in addition to the short value, so I interpret your statement of the problem to mean that the margin requirement is 1.5*$28.07 rather than 0.5*$28.07. You'll then compute about 50% return.

If the margin requirement really is just 50%, then your calculation looks correct.

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Your calculation is correct, also excluding commissions. Nice trade!

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