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If you're short a stock, and it goes up in the short term, you must put more money in the account (to build equity to a reasonable level) or close the position
by DabAsteroid 18y ago
If you're short a stock, and it goes up in the short term, you must put more money in the account (to build equity to a reasonable level) or close the position
No. One might simply add to his position (e.g. short more). It is called "shorting into the rise".
- time_management 18y agoWhat I meant, and I failed to explain this properly, was that the amount of equity you need to have in the account increases as the stock or index rises, and eventually it can happen that the position requires more money than you have, and you're hit with a margin call. You're correct that if you already have enough money in the account to hold the position, you can continue to short sell.