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Last post 03-30-2008, 12:48 AM by koreiko. 4 replies.
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  •  03-29-2008, 6:03 PM 25980

    Can I short a position I already own..?

    Reply Quote
    Ok so I think XYZ will go up before a... somthing major i.e. upgrade/downgrade, insider trading, quarterly earnings report etc... so I go long on it before the info comes out... Then all of a sudden it goes bad, can I turn around, and short a position if I own the company?  Granted I would try to dump my long shares quick, but just curious... Thanks.

  •  03-29-2008, 7:55 PM 25985 in reply to 25980

    Re: Can I short a position I already own..?

    Reply Quote
    Sure, you can do whatever you want (buy, sell short, or whatever) assuming that you have enough fund ($$$).  For example:  It's ok for you to own 100 shares of XYZ and also short 100 shares of XYZ.   So far so good, no problem there!  It doesn't matter which direction XYZ goes, you won't make any money and you won't lose any money either.   Now, let's say that you decide to cover 100 shares of XYZ.  Most brokers won't allow this kind of transaction; first they will make you sell 100 shares of XYZ before you can  cover it.   In the end, you would end up not owning any stocks; therefore, it would be better to sell all your XYZ holding before shorting it.

  •  03-29-2008, 9:57 PM 25989 in reply to 25985

    Re: Can I short a position I already own..?

    Reply Quote
    Really? Have you actually done this or you just think so? I didn't know that you can get yourself into that mess. One would assume that if you can keep the orders buy and short separately then you should be able to keep the orders sell and cover separately. One thing I know for sure is that they will not accept a "buy" and "short" order together. You get a rejection stating that you already have an opposite order. 

  •  03-29-2008, 10:37 PM 25990 in reply to 25989

    Re: Can I short a position I already own..?

    Reply Quote
    Yes, I had done it once about 2 years ago.     Would I do it again?  Absolutley not!   Therefore, my final advice to you: don't do it.    If you want to short XYZ, you would be much better off by selling your long holding of XYZ first, then shorting it.

  •  03-30-2008, 12:48 AM 25993 in reply to 25990

    Re: Can I short a position I already own..?

    Reply Quote
    Thank you for the information. Of course, it makes no sense in tying twice as much money and have neither profit nor any tax benefit.
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