mj,
My broker sold some of mine. Don't know whether he sold all. Makes me wonder if short covering isn't involved here in someway.
I might be wrong with the following comments, but if I am, it should not take someone too long to correct me.
1. When one shorts a stock, it must be done with a margin account.
2. It is my understanding that if one shorts a stock, as/if the stock declines in value, the margin one used to short is reduced. In other words, you have your money back, even though you don't cover. So you can use the money to short other stocks, or to go long, whatever.
Now, to further my understanding, it has been reported that there is no compelling reason to ever "cover".
If one covers, they must report and pay taxes on the gains.
If a stock that one shorted at a dollar is still reported as trading at a penny, or even if it is delisted, I don't believe one has to cover.
In other words, you have the money, but don't have to pay tax on it.
Again, I may be wrong.
Have fun,
Phil |
