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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Wang who wrote (126547)	2/3/2001 11:20:41 PM
From: Jon Tara	Read Replies (2) \| Respond to of 186894

Richard, there simply is no reason to short against the box any more. None. OK, one, but I'm not sure it's strictly legal. Some traders who want to be able to short on a downtick will "box" a position in advance. A trader might do this with a stock that is making a parabolic rise, prior to it's peak. After the stock has peaked, they simply sell the long side, and don't have to deal with either the uptick rule or borrowing the shares at a time when they would probably be difficult to borrow. Getting back to the wash-sale rule: it is completely agnostic about shorting against the box. The rule quite simply states that you have a wash sale if you sell at a loss and then buy back within the wash-sale period. When you shorted against the box, you executed a sell. If you had a gain, rather than a loss, no wash sale. But I'm afraid that you realized a long-term capital gain, and the shares you now own are short-term. The tax effect is EXACTLY as if you had sold your shares and bought them back. That was the intent of the change in the law. Thus, nothing is accomplished by shorting against the box.