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Politics : Formerly About Advanced Micro Devices
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To: Elmer who wrote (117029)6/21/2000 9:37:00 PM
From: Eric K.  Read Replies (2) of 1570893
 
Elmer--

Could you explain the "nice tax advantages" of writing covered calls? Aren't your premiums short-term capital gains? Moreover, I don't think you have had your long-position for over a year, so aren't you subject to your long position being called away and becoming a short-term gain as well? Given your supposedly massive wealth position, doesn't your clever strategy make all your AMD gains taxable at 39.6%, plus 9.3% extra if you are living in California, or an equivalently tax-happy state?

Isn't holding stock or leaps for over a year, and getting taxed at 20% when you sell, the most tax friendly (and arguably return friendly) strategy?

-Eric
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