Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: zebraspot who wrote (4902)	6/1/1998 9:54:00 AM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

Z, I think you are incorrect to include hedging with puts as a constructive sale. Shorting against the box was definitely attacked, primarily because it was used by "the rich" as a means of indefinitely deferring taxes. However, a constructive sale, last I heard, still required that one give up substantially all of the upside potential as well as protecting substantially all the downside. Put buying clearly would not meet this requirement. Furthermore, even a collar, properly structured, would not be a constructive sale. Of course, a collar where one sells at the money calls and buys at the money puts, would be a constructive sale as all upside and downside is eliminated. Still, puts alone as a hedge would not. Unless, of course, you have found some new rules, in which case please post a link. Regards, Bob