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Strategies & Market Trends : Advanced Option Strategies

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To: peter n matzke who wrote (339)	6/10/2001 11:55:47 PM
From: Joe Waynick	Read Replies (1) of 355

Thank you for your response. I understand what you're saying, but it seems like such a strange rule. Owning stock and writing covered calls is no more / less risky than writing naked puts. The IRS says that since one owns the stock, they should have the right to sell my stock if the price goes up beyond a set strike price, and I can receive a premium for doing so. That's a timed instrument isn't it? Why shouldn't I have the right to buy a stock if the price goes down and receive a premium for doing so? According to McMillan, these two transactions are equivalent. As usual, the IRS in its infinite wisdom wants to control how I manage my personal finances. Sorry, but I'll get off my soapbox now. ;-) Joe

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