Assume you sell 100 shares of bowie corporation short at 72, Financial Management

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Assume you sell 100 shares of bowie corporation short at 72

Protecting a short position with options

Assume you sell 100 shares of Bowie Corporation short at $72. You also buy a 70 call option for 5.25 to protect against the stock price going up.

a. If the stock ends up at $90, what will be your overall gain or loss?

b. If the stock ends up at $50, what will be your overall gain or loss?

c. If you have an unprotected short sale position (no call option), what is the most you could lose

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Financial Management: Assume you sell 100 shares of bowie corporation short at 72

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