Brandon, I love the videos and Thank You !!! I got this one wrong as I assumed it was owned for a short time period as indicated by the phrase "immediate". My calculation was based on 30% vs. 25%, ($5400.00). What am I missing?
Hi, glad you love the videos! When we talk about "long" and "short" in this context, it means whether the investor has bought ("is long") shares or sold ("is short") shares - it's not related to the time period. There is more risk in short selling, so the minimum margin requirement is higher at 30% for short positions than the 25% for long positions. Here's the chapter where we cover this in detail in our S7 course - app.achievable.me/study/finra-series-7/learn/brokerage-accounts-margin-accounts-minimum-maintenance
Thanks for your feedback - this is a complex topic! Rather than thinking of it as a hypothetical situation, think of it as two specific events: step 1 (current) and step 2 (in the future). Although you need to handle these "what if" situations for the exam, when you rephrase them with concrete numbers it gets a bit simpler~
