On TDA you can assign any sale of stock to a specific purchase in the past. This enables one to manage which shares you are selling at any given time, as opposed to having the FIFO method execute your trade by default. First in first out (for those unaware). There are other methods such as LIFO (last in last out), High cost first out, low cost first out, etc....
I have been averaging into Draftkings as a long term position, but have found that I also enjoy swing trading the stock due to the fact that I have been holding it and have become rather familiar with its movements/patterns. I purchased a few extra shares back in May around $42-$43 for the sake of reselling sometime in the near future around 60. The plan worked as expected and I sold a handful of shares yesterday for around 63.50...TDA requires the user to log in the following day to adjust the tax lot method or to assign a sale to a specific purchase. The stock does not settle for a couple days and this can be done anytime prior to settlement after the day the stock was sold. So...With that being said. This is my question...I notice I have shares from back in March of this year as well with a higher average of around $60. I have my other shares from May and they have an average of $43. My main position was purchased awhile ago (last year), and is averaged around 50 with shares purchased all over the place. I guess I am wondering if it would be wise to sell the shares purchased at $60 back in March instead - I would barely be breaking even on them, locking in next to no profit, but would inadvertently lower my cost basis and would leave the profit I could have taken on the table. This is all for the sake of having those shares for 1+ years and being able to hold them comfortably without having to risk losing any of my initial investment/capital...Or would it be wiser to take the profit I can take off of the shares purchased in May at $40 and simply keep the others until the cost rises. I guess I feel like delaying the profit taking until the shares have matured in my portfolio for a year or more would be wise so I am not paying as much tax? If i take profit now I pay the tax on it. If I sell my higher cost shares and just barely break even (nothing to pay tax on here). This enables me to sell the other shares with a lower cost basis (and therefor a higher likelihood of being profitable) later on without having to be taxed on the profit. Sorry for the rant but does this makes sense?
Submitted September 08, 2021 at 09:55AM by mrfilthynasty4141 https://ift.tt/38MzjZA
