Now you know why I warned you all last Tuesday to NOT buy more JAN call options and to SELL OFF any JAN call options by Wednesday and take profits on them which you, then, roll out into FARTHER months. You just never can tell what kind of volatility will hit you as option expiry approaches when it is this close. BY THE WAY, THE MARKETS ARE CLOSED ON MONDAY, JAN 16.....SO YOU NOW ONLY HAVE 8 days of life left on JAN calls.
You have to be very careful of the GREED and the FEAR factors on GOOG now...especially as we approach OE. GREED can make you buy positions and/or hold onto positions that you shouldn't. FEAR can make you bail out of/not buy positions that you should be taking advantage of.
Don't let the stock movements control you. YOU control your movements. Be willing to cash in and TAKE PROFITS (as I also told you to do last Friday). Be willing to buy when everyone's fleeing. ACT....do not REACT...or you're DEAD MEAT in this game.
to be honest, I am not sure about that, but it sounds questionable. I would ask a CPA, but I don't think the IRS would even be aware of your original holdings of shares until you sold them. If you bought puts in a company, for instance, at 100, then sold the puts when the stock was at 70, and just kept the shares, you would have a gain on the puts, and would owe tax on that gain. Puts as you know are not the same as shorting, and if you owned shares then tried to short the same shares, that might be what you read about. Hope this helps. By the way, I think GOOG has a way to go also.....
Thanks much for the reply.
Let me clarify what I was asking about question#3
Let's say I buy goog at 100 and continue to hold at 470. Then I buy puts to lock in the gain in order to elimnate risk without having to sell the original stock(because I don't want the gains to be realized yet for tax reasons).
I read somewhere (some time ago) that the IRS would look at this as having sold the original stock and would require gains to be realized. Not sure. Any Thoughts?
BTW, this is hypothetical in that I am not yet ready to lock in gains yet. I think there is still plenty of upside.
Open up a Currency Trading Account (OANDA.com) and fund it with $100. trade a couple times.
This way you can do the 60/40, "opt out" of IRC 988. 60% short term gains taxed at 15% and 40% taxed at 35%. blended 23%.
Otherwise you will pay 35% on short term gains.
I know for sure that 1) is a long term gain
2) first part, no, second part, not sure
3) puts have tax implications if you sell them, then the 12 month under/over rule applies to determine short vs long-term gains.
Like many others on this board, I appreciate the knowledge you bring to the table on this board. Thanks!!!
Would you please clarify a few options tax questions:
1) I buy a Leap and sell at a profit more than 12 months later. Is this a Long Term Captial Gain?
2) I buy a short term option and exercise it. Is this even considered a transaction in the eyes of the IRS? Does the 12 month period to qualify for Long Term Capital Gain for the stock start at the time of excercise?
3) Do buying protective puts to lock in gains in long stock or calls have tax implications?
a real ITM message might be: I think we consolidate 1 point then go up another 50, maybe profit taking for 2 points, then up another 70 points.... Thanks for the feedback. Just giving you what I know. But I'm only as good as the stock keeps going up! So go GOOG gazillionaires!!!!
heh, yeah, that's a good one... well, I had seen her a few times already at that point, but this was the big dinner out date. I may be getting too picky, but if a woman (or anyone for that matter; no sexism) is going to go on and on about a particular topic, she ought to at least know what she's talking about..... call me crazy, but that's just my wierd thought on the matter.
By the way, another way to think of leaps is that they are a proxy for holding the actual shares, but you can control many more shares with the same amount of money. In other words, for around $9000 you can buy a Jan 07 450 call and control 100 shares... or you could buy 100 shares for $46,800.... you just make a much bigger percentage gain on the leaps call.... sorry if this is preaching to the choir.... good luck