Replies to post #21969 on CMKM Diamonds Inc. (fka CMKX)

[Capitalist]

That is absolutely possible. In fact it's even possible to get your cost basis to be negative. However, it requires that you use a different definition of the term "cost basis" than is used by the IRS.

Basically, all buys and sells are totalled up to provide a total "cash flow out" for the position. Divide this by the number of shares you have, and that's your "cost basis". Here's an example:

Buy 100 ABC at 5: ($500 out)
Sell 50 ABC at 7: ($350 in)
Buy 100 ABC at 4: ($400 out)
Sell 100 ABC at 8: ($800 in)

Now I have 50 shares. My total cash flow is a POSITIVE $250, and another way of looking at this is that I have a total out-of-pocket cost of negative $250. So my "cost basis" on this position is negative $5/share.

[diverdon56]

Hi Janice

I would be glad to explain to you how Carbon can have a cost basis lower than the lowest price paid, as a matter of fact I am in a similar situation. I bought 310M shares @ .0001. Last Friday I sold 100M shares @ .0003. So I have 210M shares remaining cost basis $1k. 210M/1k=cost basis 4.7619E-06. Many who have followed fung derf's advice now have a cost basis of zero.

[carbon_allotrope]

Janice,

Since others have already posted accurate replies, I won't re-hash the math. I'll just say that my reduced cost-per-share is a result of the old buy-low-sell-high maxim, but with only a fraction of my shares. I wouldn't want to miss a big run-up if/when it happens, not matter how much I enjoy swing trading!

thanks for your time