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Non-Tech : Datek Brokerage $9.95 a trade -- Ignore unavailable to you. Want to Upgrade?

To: steven d. zapf who wrote (6188)	12/5/1997 8:23:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 16892

Selling short against the box is selling stock short (that is, selling borrowed stock that you don't own) while simultaneously owning the stock. I know that's confusing, repeat it a few times. :) There are two reasons why one might do this: 1. To "neutralize" a position (you neither lose nor gain no matter which way the stock goes) while deferring tax consequences into a later year. People often do this near the end of a year when they have big profits. 2. To avoid uptick shorting rules. If you first "box" your position, you can then effectively short by selling the stock that you DO own, which will not be subject to the uptick rule. You can't sell short against the box through Datek, at least not directly. You can with most other brokers. Some people apparently do do so by having multiple accounts. However, I don't beleive that you can hold two margin accounts, so it is has some limitations. The reason you can't box through Datek is apparently due to the feature that allows you to reverse a position from long to short or vice-versa in a single trade. You can't have both that feature and boxing, at least without another box - a check box. This is apparently too much for Datek to handle. :)