Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: labs who wrote (41486)	7/24/1999 5:56:00 AM
From: eims2000	Read Replies (2) of 122087

First off, when you shorted the stock you SOLD borrowed shares to someone else and you received CASH into your account. So if the company goes belly up, you still have the CASH in your account and thus a gain of 100%. As far as I have seen, even with bankrupt companies, there is usually still some liquidity in the stock though at very very low price so that you could cover then. I think the only tax advantage in this situation is if you are able to hold the short for over a year and pay only capital gains tax on it. rhansen

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