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Strategies & Market Trends : Options

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To: Seldom_Blue who wrote (5025)3/15/2000 9:38:00 AM
From: Bridge Player  Read Replies (1) of 8096
 
If a call you have written is exercised and your stock called away, the premium received when the call is written is added to the amount received for the stock to establish your total sales price. There is no separate taxable event due to the written option in and of itself.

The gain/loss is long term or short term depending solely on your holding period for the underlying stock. This holding period is unaffected by when you actually wrote the call option or how long you were short the option.

BP
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