Also, it's just an educated guessing game about when or if the proposed tax changes will take effect. The risk of a short squeeze. If the price of the stock rises, people who sold short will want to close out their positions quickly to avoid future losses, so they must start buying the stock to repay their borrowed shares. The increased demand keeps the stock price rising, which in turn induces more people to sell. If enough people remove their stock from the pool of borrowed shares, you may find yourself unable to borrow shares and be forced to deliver your shares to close out the position before you can take advantage of a possible tax cut.
Short squeezes are more common for stocks with large short interest.
Sound economics and financial analysis should govern whether you want to sell any stock. Tax savings should not be the primary reason for selling a particular stock. Using the short against the box technique is something to consider only if you are planning on selling the stock now anyway. As always, check with your broker on the specific costs involved when determining whether this technique could be beneficial. Potential Tax Benefit of the Short Against the Box Technique 1.