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Technology Stocks : Intel Corporation (INTC)
INTC 46.95-2.8%Jan 16 3:59 PM EST
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To: Noel who wrote (173189)2/26/2003 2:06:53 PM
From: tcmay  Read Replies (1) of 186894
 
"JB, Taxation of CCs

My understanding was that all options are treated as short-term gains."

I'm no expert on this, so I won't comment.

The important point is that for small investors in the U.S., the equation is different than from those who a) are not in the U.S. but are writing options, b) who have sophisticated tax strategies, c) who are hedge funds.

" 'You can always roll them (CC's) to a higher strike at a later date. That may also generate a capital loss (for tax purposes) while protecting and even enhancing unrealized future gains. '

"That is exactly what I did a couple of years ago and Intel kept on climbing at which point I gave in. "

Same way that many who were selling puts on the way down eventually gave up on rolling their puts over.

For me, taxes are complicated enough without having reams of complicated puts and calls to keep track of.

I don't figure I can time the market, so I hold long-term the stocks in companies I think will benefit from long-term changes in technology and the business climate.

Writing puts and calls on the entire position is betting that I know which way the market will move, or not move, in the short term.

And writing puts and calls on some small fraction of the position is just an irritation on April 15th...an annonying mosquito buzzing around, adding nothting substantive while complicating my calculations even more.

--Tim May
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