The question may seems dumb ,

[mervyn]

That’s called shorting against the box.

It’s against the rules, and can get you into hot water with The Man, because this technique can be used to lock in profits without paying taxes.

https://www.investopedia.com/terms/s/sellagainstthebox.asp

Short the box is ok unless you are trying to game the system. Long/Short hedge funds do that all the time, as far as I know, m2m.

 

[Drawdown Addict]

From the NFA

"Can I open long and short positions on the same market at the same time? No. In accordance with National Futures Association (NFA) rules, you may not open long and short positions on the same market at the same time."

There are also a handful of CME and CFTC regs that apply. Spend a couple of minutes on Google. Doing it in multiple accounts raises fraud issues and 1256 and MTM issues. No wash sale in futures, but it is a fool's errand.

 

[ETJ]

@Drawdown Addict

I'd say no wash sale in my post. You might want to read it again. The 1256 issue is MTM and then there is always the NFA and the CFTC.

 

[ETJ]

kmiklas said:
That’s called shorting against the box.

Constructive sale issue?

Long/Short funds don't do virtually identical securities. There are year-end outs you can use to short, but it's over a 30-day period.

https://www.investopedia.com/terms/...include making short,of an already-held asset.

 

[vanzandt]

That’s called shorting against the box.

It’s against the rules, and can get you into hot water with The Man, because this technique can be used to lock in profits without paying taxes.

https://www.investopedia.com/terms/s/sellagainstthebox.asp

18 posts and you're the first to mention this.
>>>> ET

 

[ETJ]

The constructive sale applies to securities and physically settled futures and forwards.

 

[newwurldmn]

Lets say,I have two trading accounts and hypothetically trade the same instrument on both accounts every day. If I initiate a long position on one account, I initiate a short position on the other account simultaneously at the same price with the same position size. Is there a way to balance the profits and losses on both accounts? Additionally, is it possible to ensure that one account always has a profitable position while the other account always has a losing position, even though the trades are taken randomly? I have tried to solve this using position sizing, but I am not able to do so
if there a way to do this with more than two accounts with the same outcome ?
thanks

there is only one way to ensure one account to be profitable at the expense of the other. For this to work one account would have to have an arbitrage over the other.

You can buy a treasury in one account and short it in the other. The treasury will expire at 100 and you will earn. But you don’t need to lose in the second account to earn the risk free rate.

trading a box is generally illegal as it’s considered market manipulation.

 

[kmiklas]

18 posts and you're the first to mention this.
>>>> ET

Yeah I thought same…

‘sup Vanzy!

 

[Overnight]

@Drawdown Addict

I'd say no wash sale in my post. You might want to read it again. The 1256 issue is MTM and then there is always the NFA and the CFTC.

They're called wash trades, and they're illegal. Like I said, they aren't worried about peon retailers.

 

[mervyn]

Obviously a perfect offsetting trade would never make money, it is common sense. The argument is whether you can do it occasionally if the setup calls for it. Cutting losses quicker than taking profits is the key.