The conversation between human and AI assistant.
What are some important tax implications to take into account if you want to be a short-only trader? Also does the type of security you short matter?
Good to know, thank you! Are there any other important factors to consider when shorting stocks?
One important factor to consider is the borrowing cost associated with shorting stocks. When you short a stock, you're essentially borrowing shares from someone else to sell on the market. There may be a cost associated with borrowing these shares, known as the "short interest rate." This cost can vary depending on the availability of the shares and the demand for short positions on the stock. It's important to consider this cost in addition to any tax implications when deciding whether to short a particular stock or security.