Dave, I enjoy having a good dialog with you. Sometime soon though, I have to take a dinner break.
Here's my take on the taxes. I pulled out several thousand dollars profit by selling and then buying. Yes, I owe the IRS. But with just a 'buy and hold' strategy, I'd have no realized profit at all. Even though I'll pay the taxes, I net out better than you do and I still have my original position.
I did consider buying puts on Friday, but I thought the premium was excessive. I wonder, assuming the price of PMCS continues to rise, how your losses on the puts will compare to my taxes.
Alternatively, if you had bought your puts when I'd sold my shares, then sold your puts when you perceived a price bottom and when I bought back my shares, wouldn't our different strategies come down to the same tax bill? -Except that my taxes are long-term and yours are short-term. And if you'd say that you wouldn't have sold your options, are you saying that you'd prefer to let them expire worthless? That can be as expensive as my tax bill. |
