A customer sells short 100 shares of ABC stock at $40 and buys 1 ABC...
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Finance
A customer sells short 100 shares of ABC stock at $40 and buys 1 ABC Mar 40 Call @ $5. The maximum potential loss is:
A. unlimited since the client is short stock
B. $4,000
C. $7,500
D. limited due to the hedge
*Please explain so I can understand.
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