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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock
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To: Ibexx who wrote (1521)1/16/2001 7:19:59 AM
From: stock leader  Read Replies (1) of 2477
 
for example, assume you sell the 1000 shs BEAS on June 5 at a loss and then cover the 10 Jun BEAS calls on Jun 10 for a loss also. as long as long as you don't buy any BEAS securities (shorts, longs, puts, calls) 30 days after June 10 then all of your loss is allowed. But let's say you buy 1000 shs of BEAS on July 1 because the price dropped big. In this case, you will have a disallowed loss on 1000 shs you sold of BEAS on June 5, but will be able to deduct the loss on covering your 10 Jun BEAS calls on June 10. the disallowed loss would be added to the basis of your 1000 shs you purchased on July 1.
here's the reason you deduct the 10 Jun BEAS call loss: as of June 10 you disposed an equivalent of 2000 shs BEAS (1000 shs sold, and 10 calls covered=1000 shs) but you only retook a position on July 1 in 1000 shs of a BEAS security. so you offset this against one of the losses and that is your wash, but the other 1000 shs position loss is deductible
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