CFC at $7.60

[ucodegen]

@drunkle
seems like the tax basis is the most important thing to note… taxing options at full income rate blows…

Yes it does… as with most taxes.. but you have extraordinary leverage with lower risk with options… if you are careful. The tax at income rate is similar to STCG(Short Term Capital Gains). Short term capital gains are for issues held less than a year, and options generally have a less than one year period. Remember that with options, you are often making a contra bet with the originators, who are often the so called experts who may be running mutual funds (They will be the ones on the short side with options).

NOTE: On options spanning more than 1 year period, I would need to check on their tax status. They may be covered by LTCG. Depends upon the amount of time the option is held.

Thanks for calling me ‘professor’.. though I really consider myself a gifted amateur. I figured that working for a salary was not going to cut it these days.. so I have set out to teach myself much of what the experts don’t tell you. In 1997 (amazing how you can remember things that change course of ones life) I re-ran numbers from a portfolio that I was going to set up in 1988 and never got around to. After much crying in my beer, I took action to learn… of course I had some more crying in my beer in 2000-2001, but it wasn’t nearly as bad as the revelation in 1997.

[ucodegen]

@barnaby33

All option purchases are effectively ‘long’. Not true, you can write puts and calls, essentially shorting them.

Writing options are different than purchasing an option. This is why I made the distinction on purchasing an option. In the case where you are writing or originating an option, you are effectively on the short side. If you look at where I put in italics on this entry, the originators of the put/call could be said to be having the short position. See sections specifically dealing with Buy a put, Buy a call.

[ucodegen]

@barnaby33

All option purchases are effectively ‘long’. Not true, you can write puts and calls, essentially shorting them.

Writing options are different than purchasing an option. This is why I made the distinction on purchasing an option. In the case where you are writing or originating an option, you are effectively on the short side. If you look at where I put in italics on this entry, the originators of the put/call could be said to be having the short position. See sections specifically dealing with Buy a put, Buy a call.

[ucodegen]

@barnaby33

All option purchases are effectively ‘long’. Not true, you can write puts and calls, essentially shorting them.

Writing options are different than purchasing an option. This is why I made the distinction on purchasing an option. In the case where you are writing or originating an option, you are effectively on the short side. If you look at where I put in italics on this entry, the originators of the put/call could be said to be having the short position. See sections specifically dealing with Buy a put, Buy a call.

[ucodegen]

@barnaby33

All option purchases are effectively ‘long’. Not true, you can write puts and calls, essentially shorting them.

Writing options are different than purchasing an option. This is why I made the distinction on purchasing an option. In the case where you are writing or originating an option, you are effectively on the short side. If you look at where I put in italics on this entry, the originators of the put/call could be said to be having the short position. See sections specifically dealing with Buy a put, Buy a call.

[ucodegen]

@barnaby33

All option purchases are effectively ‘long’. Not true, you can write puts and calls, essentially shorting them.

Writing options are different than purchasing an option. This is why I made the distinction on purchasing an option. In the case where you are writing or originating an option, you are effectively on the short side. If you look at where I put in italics on this entry, the originators of the put/call could be said to be having the short position. See sections specifically dealing with Buy a put, Buy a call.

[equalizer]

Here is the mashup of CFC and KFC

http://bp1.blogger.com/_wFWqWIH-WFU/Rw4y8E69jUI/AAAAAAAAChA/qC–ME7vUbg/s1600-h/cfs1.png

[equalizer]

Here is the mashup of CFC and KFC

http://bp1.blogger.com/_wFWqWIH-WFU/Rw4y8E69jUI/AAAAAAAAChA/qC–ME7vUbg/s1600-h/cfs1.png

[equalizer]

Here is the mashup of CFC and KFC

http://bp1.blogger.com/_wFWqWIH-WFU/Rw4y8E69jUI/AAAAAAAAChA/qC–ME7vUbg/s1600-h/cfs1.png

[equalizer]

Here is the mashup of CFC and KFC

http://bp1.blogger.com/_wFWqWIH-WFU/Rw4y8E69jUI/AAAAAAAAChA/qC–ME7vUbg/s1600-h/cfs1.png

[equalizer]

Here is the mashup of CFC and KFC

http://bp1.blogger.com/_wFWqWIH-WFU/Rw4y8E69jUI/AAAAAAAAChA/qC–ME7vUbg/s1600-h/cfs1.png

[Coronita]

seems like the tax basis is the most important thing to note… taxing options at full income rate blows…

 

Not suggesting this in any sort of or form. But considering our beloved government is considering wasting taxpayer's money on bailouts….

 

Have you ever looked at the brokerage statement and figured out  what transactions get reported to the IRS and what doesn't and how things get reported :), particularly paying attention to the buying/selling, writing of options, and writen options that are left to expired???? The analysis would be interesting the implications would be left an exercise to the reader….

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

seems like the tax basis is the most important thing to note… taxing options at full income rate blows…

 

Not suggesting this in any sort of or form. But considering our beloved government is considering wasting taxpayer's money on bailouts….

 

Have you ever looked at the brokerage statement and figured out  what transactions get reported to the IRS and what doesn't and how things get reported :), particularly paying attention to the buying/selling, writing of options, and writen options that are left to expired???? The analysis would be interesting the implications would be left an exercise to the reader….

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

seems like the tax basis is the most important thing to note… taxing options at full income rate blows…

 

Not suggesting this in any sort of or form. But considering our beloved government is considering wasting taxpayer's money on bailouts….

 

Have you ever looked at the brokerage statement and figured out  what transactions get reported to the IRS and what doesn't and how things get reported :), particularly paying attention to the buying/selling, writing of options, and writen options that are left to expired???? The analysis would be interesting the implications would be left an exercise to the reader….

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

seems like the tax basis is the most important thing to note… taxing options at full income rate blows…

 

Not suggesting this in any sort of or form. But considering our beloved government is considering wasting taxpayer's money on bailouts….

 

Have you ever looked at the brokerage statement and figured out  what transactions get reported to the IRS and what doesn't and how things get reported :), particularly paying attention to the buying/selling, writing of options, and writen options that are left to expired???? The analysis would be interesting the implications would be left an exercise to the reader….

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Author]

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