Short Term Capital Gains Tax

Short Term Capital Gains Tax

Short Term Capital Gains Tax

Short term traders try to make a profit by buying or shorting a stock over a limited time frame. Every time a stock is sold, there is a tax implication. Traders need to examine those implications and their impact on the profitability of the trade.

Unlike some fixed investments, stocks tend to fluctuate. A stock can go up or down several points in a day, more than that over a long time frame. Investors can buy and sell at any point during that time.

Making Smart Investment Decisions

For example, let’s look at the day ending prices for a mythical stock, XYZ Corp: