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Non-Tech : Paired Trades and Hedging Strategies -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (48)12/14/2004 4:14:33 PM
From: Biomaven  Read Replies (1) | Respond to of 136
 
I think this is as much a tax-drive decision as anything. If you simply buy back the options you (maybe) get a nice tax loss. I say "maybe" because I haven't looked through the tax rules to see if there's something that might stop you recognizing the loss in this situation. Not sure if it depends on whether that was a "qualified" covered call at the time you wrote it or not.

Of course most people would simply take it as a tax loss and that would be the end of it. Even if this was technically wrong (and I have no idea if it is) it's not something the average IRS auditor is ever going to understand or discover. <g>

Peter



To: Sam Citron who wrote (48)12/17/2004 10:03:53 PM
From: tyc:>  Read Replies (1) | Respond to of 136
 
In my experience, I always considered it "mission accomplished" when a covered position was called away; the "return if exercised" was the maximum return achievable from the position. Time to look for another attractive position.


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