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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: J.S. who wrote (8388)	3/1/1998 10:25:00 AM
From: PAL	Respond to of 13594

Why would funds short against the box so early in the year. I take it that this is done mostly to delay tax consequences. Can you clarify? J.S. Excellent question and astute observation. The landscape for shorting against the box (SAB) was changed by the 1997 tax reform. Previously SAB was popular for deferring capital gains tax to the following year. But SAB can be used for locking profits. Many funds have revised their charter to include that activity. By SAB the fund is at a status quo: it will not gain nor lose regardless what the stock does. SAB is a short term strategy. Look forward to your report Monday. PAL