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Politics : Formerly About Advanced Micro Devices
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To: kash johal who wrote (105330)4/13/2000 11:41:00 PM
From: deibutfeif  Read Replies (2) of 1573876
 
Kash, re:If the calls expire worthless - they reduce my cost basis with no immediate tax consequence as an example.

I'm not clear on this. I assume you mean no tax consequence to the underlying position.

Expired calls are short term capital gains (in the amount of the premium) with the attendant tax consequences. Actual basis in the underlying position does not change.

Admittedly, the net profit realized can be considered a reduction in basis to make one feel warm and fuzzy.

~dbf
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