Answer to Question #165075 in Finance for Rochelle Williams

Question

You want to increase your position in XYZ Inc. The current share price is $10. You need a margin deposit of 20% to open the position. If you put down $1000 to open the trade, how many shares do you have exposure to?

Answer 1

If you put down $1000 to open the trade, then you have to exposure $N = \frac{1000} {10×0.2} = 500$ shares.