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