You sell a stock short for 1000.
A year later, you buy it back at 800.
The stock pays annual dividends of 60.
The margin requirement is 50%
and the interest on the margin requirement is 8%.
Calculate the yield rate on the short sale:
SCalculate Gain on Short Sale:
Short Sale Gain = Sale Price - Buyback
Short Sale Gain = 1000 - 800
Short Sale Gain= 200
Calculate Margin Requirement:
Margin req. = Sale Price * Required Margin %
Margin req. = 1000 * 50%
Margin req. = 500
Calculate Interest on Margin:
Interest on Margin = Margin requirement * Margin Interest Rate Crediting
Interest on Margin = 500 * 8%
Interest on Margin = 40
Calculate short sale yield:
| Short Sale Yield = | Gain on Short Sale + Interest on Margin - Dividends |
| Margin Requirement |
| Short Sale Yield = | 200 + 40 - 60 |
| 500 |
| Short Sale Yield = | 180 |
| 500 |
Short Sale Yield = 36%
You have 1 free calculations remaining
What is the Answer?
Short Sale Yield = 36%
How does the Short Sale Yield Rate Calculator work?
Free Short Sale Yield Rate Calculator - Calculates the Yield Rate on a short sale of stock.
This calculator has 5 inputs.
What 4 formulas are used for the Short Sale Yield Rate Calculator?
Gain on Short Sale = Sale Price - Buyback PriceMargin requirement = Sale Price * Required Margin Percentage
Interest on Margin = Margin requirement * Margin Interest Rate Crediting
Short Sale Yield = (Gain on Short Sale + Interest on Margin - Dividends)/Margin Requirement
For more math formulas, check out our Formula Dossier
What 4 concepts are covered in the Short Sale Yield Rate Calculator?
- interest
- payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate
- short sale yield rate
- stock
- the shares of which ownership of a corporation or company is divided
- yield
- How much an investment returns in terms of interest rate
