How Margin Calls Work (Short Selling)
What happens when your short position moves against you
1 / 7
1
Initial State
- You have $100 in cash.
- Your broker can locate KKR shares to lend you for short selling.
- You want to short $200 worth of KKR stock, betting the price will fall.
👤
You (Short Seller)
person
Balance Sheet
in $000s
Assets
Cash
100
Total100
Liabilities
Total0
Equity
Net Worth
100
Total100
🏦
Your Broker
institution
Balance Sheet
in $000s
Assets
Lendable Shares
200
Total200
Liabilities
Due to Lenders
200
Total200
Equity
Total0
Step 1 of 7