SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Ascend Communications (ASND)
ASND 208.57+4.1%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Kevin who wrote (15994)10/1/1997 6:07:00 PM
From: Chi-X   of 61433
 
Kevin, "shorting against the box" means having both a long position and a short sale position in the same stock. Both positions are in the same amount of shares.

For example, lets say on Monday I shorted 500 shares @ $36. Then, on Tuesday I went long at 500 shares @ $31. This would mean my position is boxed in. This would give me several options. (1) If this is a dead cat bounce and ASND keeps falling, I can close my long position with a stop sell at $31 1/8 and allow my short sale to gain even more. (2) If ASND continues to rise, I can cover my short with a stop buy at $35 7/8 and reap the profits. (3) If ASND continues to hang between my long and short position and I get impatient, I can just call up my broker and tell him to place the long shares into my short account to cover my short position.

Also, lets say I short sale a hot volitile stock at $35 but I'm afraid I may have not found the top. I can also go long at $35. I will be at a net $0 gain/loss wherever the stock goes.

There are other ways of shorting against the box such as buying a stock long and buying puts. Also other reasons for doing so such as avoiding tax gains.


Cheers,
Chi-X hath Spoken!

Controversial Princess Diana Crash Photos
members.aol.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News