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Buy To Close

  

"Buy to close" involves buying back an asset to “close” a position that was originally sold short.

For example, an investor might first borrow stock from a broker or other individual, and then he writes a contract to sell it to another buyer. The investor is betting that the price of the stock will move lower in order to generate a profit.

The investor must then buy the shares back and return them to whomever they were borrowed from. If the purchase price is less than the selling price, a profit can be made.

But...then you pay taxes. Like rain on your wedding day.

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