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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: JGoren who wrote (41)4/19/2001 7:15:57 PM
From: cfoe   of 5205
 
Options transactions, if not related to a transaction in the same stock (such as sell the stock for a loss, but buy options to retain the stock - doing this would run afoul of the wash sale rules), are separate and any loss or gain is treated in the same way as similar transactions in the underlying stock.

So, buying back the calls is simply a closing of the transaction that began when you sold the calls - nothing more, nothing less. since the transaction started with a "short-sale," the gain or loss is short-term for tax purposes.
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