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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (50192)	3/20/2001 1:37:36 PM
From: Adam Nash	Read Replies (2) \| Respond to of 77400

That's an interesting bit of mental accounting, ie, behavioral finance. Going long and short at the same time can only make sense when relating the relative transaction costs of each move. For example, by going short, instead of selling, you are going to pay margin rates on the amount you short. At the same time, you might avoid capital gains taxes on the amount, if you had a gain. Then again, I am sure the IRS would say that the transaction is "substantially the same" as a sale, and you'd owe taxes anyway. I would recommend against "going long and short" the same stock. It really doesn't make any analytical sense, and the good feeling you get from "keeping your long position" is just an illusion if you have shorted out a portion of it. The short position jeopardizes your long position every bit selling would, and likely more due to the margin interest. JMHO.