I bought back two blocks of AMZN to cover my short position:
100s @ $58.09
100s @ $58.088
Commission = $10.99
I'm covering my short position as AMZN continues to eat profits from my other winning positions. Also, I didn't see that AMZN price will be rationalized in the near future. AMZN's quarterly earning release and expected strong Q4 earnings may support the stock for another several months which means substantial risk to my portfolio if I don't choose to cover this position (AMZN represented 34% of my portfolio value as of yesterday close).
I'm incurring a tax loss of $5,065 in the book, which helps to mitigate my inadequate tax withholding in earlier parts of the year.
The expensive lessons:
- Don't short a company only for valuation
- Only short until there are signs of business deteroriation
- Also, it makes more sense to short by options -- limited risk and better payout