What happens to your trade value if the stock price increases?

• A. The trade value decreases due to leverage.
• B. The trade value remains the same.
• C. The trade value increases, reflecting the higher price per share.
• D. The trade value becomes invalid.

Answer: (C)

Trade value follows the price per share times the number of shares you own. If you hold the same amount of shares and the stock price goes up, the product increases, so your position’s value rises. For example, 100 shares at $50 are worth $5,000; if the price climbs to $55, the value becomes $5,500. This is why the trade value increases with a higher share price. The other options don’t fit: value wouldn’t automatically fall because of leverage when prices rise, it wouldn’t stay the same unless the price didn’t change, and it wouldn’t become invalid simply from a price increase.