Shorting for reduced Capital Gains Tax

[Triple B]

Gday.
New Here.
Is there a strategy where you have say 10 positions and trade them Long, then when those positions are moving down you short them , but also keep the long position open.
This way you could hold the Stock/ instrument for 12 months paying tax on only 50% of profits.
You trade the long Side of the Stock/instrument and have some short positions already in place for a sudden bear Market.
This will obviously mean no money to be made during short positions held but may be more effective for tax .
Does this strategy have a name?
is it viable?
Thanks
Brendan

 

[Triathlete]

You would be Hedging your position..

 

[Wysiwyg]

Long (not CFD) stock positions won't cost you to hold but what is the overnight borrow cost on a CFD short stock position with your broker? Multiply that over a year.

 

[tech/a]

It's a good strategy looking at things in hindsite
Putting it into practice in realtime is a very different story.

Give it a go on paper and you'll see what I mean
Can you pick top and bottoms in realtime?

 

[Triple B]

Thanks for the replies.
CFD Short positions with FP Markets is 1.5%pa

Give it a go on paper and you'll see what I mean
Can you pick top and bottoms in realtime?

Sometimes
Would only be chasing Long major trends off support after periods of probable accumulation.
Have usually got a target price for exit and look for signs of weakness. trailing stop exit also
So probably 2-3 long positions per stock per year
Will be trading short and long with small CFD account when I go Live so my question was more one of curiosity rather than to help my immediate plans.

 

[Wysiwyg]

Short positions pay dividends rather than receive them.

 

[rcm617]

The tax you pay on any trading profits on the short positions might negate any advantage you get from halving your tax on the long positions. I usually find I have enough shares that I can sell at a loss to offset any gainers I have held for less than 12 months as most of my shares are held for the long term. Useful to get rid of a few dogs at the end of the financial year.

 

[Triple B]

Short positions pay dividends rather than receive them.

Yes. and the stock general drops at least that amount ex dividend day.
Just need to know the day and get out if you don't trust it.

 

[Triple B]

The tax you pay on any trading profits on the short positions might negate any advantage you get from halving your tax on the long positions. I usually find I have enough shares that I can sell at a loss to offset any gainers I have held for less than 12 months as most of my shares are held for the long term. Useful to get rid of a few dogs at the end of the financial year.

No profits on short positions as long positions are held at the same time.
Finance is $5.0% pa long, 1.5% short
so will be paying 6.5% for about 60% of the year.
catch the first up trend .stay long with pos on till next signs of weakness then short pos . If you only get the one say min 15% trade for the year In the stock so be it.
have several short position on and if panic sets in remove all long asap and take a short ride to $$$$

 

[McLovin]

No profits on short positions as long positions are held at the same time.

A realised gain on the short is not netted out against a non-realised long, unless you're using mark-to-market in which case you cannot use the CGT discount.

 

[Triple B]

A realised gain on the short is not netted out against a non-realised long, unless you're using mark-to-market in which case you cannot use the CGT discount.

Bugger!
ATO Dogz