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Strategies & Market Trends : Tech Stock Options
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To: HairBall who wrote (58101)11/27/1998 6:31:00 PM
From: JGoren  Read Replies (1) of 58727
 
I know this has been discussed some time before on the thread in some respects but I am looking for a way to hedge against market declines using my big winning stocks. I would never short except against the box, using the profit to reduce margin and to avoid paying capital gains tax on some of my big winners. Obviously, I realize there is a short-term capital gain (or loss) on the short transaction, itself.

I want to know exactly how selling short against the box works. I know you sell the stock, pay the regular commission of a sell, take the money and put it in your brokerage account, pay any dividends to the one from whom you borrow the stock. But I would like a really good and thorough explanation of how it all works from a procedural and cost standpoint from beginning to end: What the costs are, when the buy side of the transaction has to be closed, etc.
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