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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: Kaye Thomas who wrote (567)	11/21/1998 9:32:00 PM
From: Marc Lavine	Read Replies (2) \| Respond to of 1383

If options are available on your stock, you can protect your downside by buying a put. This may be more expensive than selling short against the box, but if the put isn't in the money when you buy it you won't have a constructive sale, so you won't have to worry about holding a naked long position for 60 days. One difference between these to be aware of is that buying the put would create a straddle, which according to my reading of the regulations, would apparently reset the holding period of the stock, unless the stock had already been held for the long-term holding period before buying the put. This is described in section 1.1092(b)-2T, available here: frwebgate.access.gpo.gov