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Technology Stocks : Intel Corporation (INTC)
INTC 50.59+4.9%Feb 6 9:30 AM EST
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To: David Ford who wrote (6262)12/12/1996 7:18:00 AM
From: Bernard Newman   of 186894
 
Shorting against the box is when you own, say 100 shares (for instance) and sell 100 shares short. Effectively, it's the same thing as if you had just sold your original 100 shares. If the stock goes up, your short position will cost you as much as the gain on your long shares. If the stock declines, your long shares will decline as much as your short position rises. The difference is that for I.R.S. purposes, it is two separate transactions. So you can delay paying the capital gain until "later" (because you're not selling the long shares) but lock in your profit now (because your short position will increase in value dollar for dollar if the stock falls).

I'm glad to help and explain this. Don't take this personally, David, but for the sake of IBEXX, your question helps to prove what I said yesterday...that very few know how to "short against the box", even if it is simple.
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