Microsoft KB Archive/842873

= Information about how to sell a stock short and about how short sell calculations appear in Money =

Article ID: 842873

Article Last Modified on 11/11/2004

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APPLIES TO


 * Microsoft Money 2002 Standard Edition
 * Microsoft Money 2001 Standard Edition
 * Microsoft Money 2000 Standard Edition
 * Microsoft Money 2000 Business & Personal Edition

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INTRODUCTION
This article contains a brief description of how to sell a stock short. It also describes how short sells appear in Microsoft Money.



MORE INFORMATION
When you sell a stock short, you are selling stock that you do not currently own. To sell a stock short, you borrow the shares from your brokerage firm, sell those shares and then keep the proceeds. After a specified period of time, you use the proceeds to buy stock and to repay your brokerage for the borrowed shares.

Investors who sell short believe that the price per share of stock will fall, and that they will be able to purchase those shares at a reduced cost later to replace the shares that they borrowed from the brokerage. The net gain or loss is the difference between the sale price and the buy back price multiplied by the total number of shares. Generally, you sell short in anticipation of falling stock prices. If the price per share drops, you will make a profit if you sell short.

When you sell a stock short and record the transaction in Money, the cost basis for the transaction appears as the absolute value of the cost basis, or the expected cost basis. Because you have not purchased the stock, Money cannot calculate a real cost basis. After you complete the transaction and replace the shares that you borrowed from the brokerage, or cover the short, Money provides an accurate calculation.

Keywords: kbinfo kbtshoot KB842873

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