SHorting against the box to circumvent SEC rule

[jason46242003]

Hi,

I'm currently a day/swing trader, but my account is under 25K. I don't want to freeze my account by making more than 3 round trips in 5 days. But sometimes, an opportunity comes and I just have to trade out of my position. So I wonder, if I bought a stock, and short sell it in the same day, is that considered a day trade by the SEC. Or on the other hand, short sell a stock first, then later buy the stock in the same day to lock in my profit.

 

[Bolimomo]

If your broker would let you short and buy (not buy to cover) in the same account. Many brokers won't. I sometimes ended up with a boxed position (having both long and share shares at the same time) because of some order errors.

Another thing: you have less than $25K, a limited capital to trade with. Longing and shorting both take away your available buying power.