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re: Options Trading Thread
Posted on 1/5/24 at 8:28 am to Jag_Warrior
Posted on 1/5/24 at 8:28 am to Jag_Warrior
What type of tax treatment do you get with index options over individual?
1
Posted on 1/5/24 at 3:32 pm to LSUtoOmaha
Good information to have:
quote:
Section 1256 of the Internal Revenue Code (IRC) states that nonequity options contracts are taxed at 60% of the long-term capital gains rates and short-term capital gains tax rates at 40%—regardless of how long the trade was opened for.
Section 1256 contracts are also marked to market at the end of each year; traders can report all realized and unrealized gains and losses, and they are exempt from wash-sale rules.
Posted on 1/5/24 at 7:16 pm to Jag_Warrior
Interesting. I wonder what the reasoning is behind that
Posted on 1/5/24 at 9:51 pm to Jag_Warrior
Happy New Year. 2023 was great, 80% year for me. Nothing exciting right now. Mostly cash, most of my longs are in the crypto space and I will close if/when the etf is announced. All indicators point to either a ripper the next week or two or if we just go down from here to say 4500 spx ill get quite long. Either way I think its chop time for a month or two, possibly test all time highs then down again? the upward move is not sustainable at this point. Time to be patient in my opinion but I am net buyer of options most of the time. I truly hope all my options players had a great year, I think 2024 is going to be awesome as well, just time to be patient. Quite likely, and as has been seen this week, rotation out of megas into small caps, financials, industrials, etc. S&P IWM may outperform the QQQ this year. Will try and post more this year.
Posted on 1/5/24 at 10:04 pm to LSUtoOmaha
I’m not into conspiracy theories, but my wild guess is that it has something to do with index options, options on futures and futures contracts (all products which are covered under this rule) being areas mostly populated by professional traders or dealers… and that same group also gets much friendlier tax treatment than those classified as “investors”. But again, that’s just a guess and assumption on my part.
Posted on 1/5/24 at 10:12 pm to Jag_Warrior
That makes sense. I wouldn't consider it a conspiracy theory; it feels like some weird lobbying deal
Posted on 1/5/24 at 10:21 pm to thatguy777
quote:
Happy New Year. 2023 was great
Will try and post more this year.
And a happy New Year to you and yours. Yes, 2023 was a rather amazing year. It’s taken awhile to build a consistently profitable system, but this seems to be carrying the water better than I ever expected.
I know that you’re busy with family, but hope to see you around more this year.
Posted on 1/5/24 at 10:24 pm to LSUtoOmaha
quote:
it feels like some weird lobbying deal
I’d say that’s it… much like the carried interest provisions that every POTUS says he’s going to go after, but never does. Neither side of the aisle is going to bite the hands that feed (with $ bills
).Posted on 1/5/24 at 10:39 pm to Jag_Warrior
Cheers bro I know you got this down, we are always learning though, right. We are on two totally different systems and making money, still interested in a meetup and I am getting to the point (kid shite) where I may be able to go to a conference. I just don't want to do some corny conference that I will not get much out of. A lot of folks in this space try to sell you on BS...Hope you had a good holiday season. let's wreck '24
Posted on 1/6/24 at 4:32 am to thatguy777
quote:
I am net buyer of options most of the time
I’m not a trader so I just use cash secured puts to get premium or enter a long stock position if assigned.
I’ll also sell covered calls at a strike that I think is a satisfactory price for my underlying stock.
Statistically, most options expire worthless. I work full time so I imagine this type of strategy/tactic requires your full attention. Congratulations on a great year.
Posted on 1/6/24 at 8:38 am to makersmark1
I definitely spend a lot of time on this. I’ve been able to find a way to balance it out with my day job. If you are buying options 30+ days out it doesn’t require you to look at a screen all day, you can base decisions off of daily closes for the most part. The more time spent being at a computer the better though
Posted on 1/6/24 at 9:31 am to thatguy777
quote:
Cheers bro I know you got this down, we are always learning though, right.
Exactly. If we ever think that we’ve got the options puzzle totally put together and can stop learning, that’s probably the day that we’re destined to take some hard hits.
quote:
We are on two totally different systems and making money, still interested in a meetup and I am getting to the point (kid shite) where I may be able to go to a conference. I just don't want to do some corny conference that I will not get much out of. A lot of folks in this space try to sell you on BS...Hope you had a good holiday season. let's wreck '24
That’s what I like about what we do. We can cheer for and try to help each other, and even with different strategies and systems, it’s possible for all of us to still chalk up solid wins. If you’d asked me 20 years ago if I would someday be seeing triple digit percentage returns on a consistent basis, I’d have said, ”not without winning the lottery.”
Yep, it’s definitely true that with stocks and (especially) options and futures there are a LOT of snake oil salesmen. With the general investor conferences, you really have to have a plan for what you want to learn more about and who or what companies you want to meet. In Orlando I only met with three people who made the conference worth it for me: Seth Freudberg of SMB Capital, Charles Dombek, CPA and a pro futures trader who also did options on futures. The information and opportunities I got from just those three will translate into thousands in gains and thousands in taxes that I won’t have to pay. The autographs, pictures with the famous (and infamous) and the short interview that made it onto Fox Business News were just icing on the cupcake. Yes, there were also more than a few hucksters there too. But having a (dark) past in ‘80s real estate, I guess I can pick those folks out from 20 yards away.
This year, I plan to focus more on CBOE classes, as well as hopefully making it to at least a couple of Tom Sosnoff’s seminars. I’d make an effort to meet up with any of you guys at a conference or seminar that’s convenient for us.
Best of luck and happy trading to all.
Posted on 1/6/24 at 4:09 pm to Jag_Warrior
You got interviewed on Fox Business ?
Posted on 1/6/24 at 4:56 pm to LSUtoOmaha
Apparently it showed on a segment of Charles Payne’s show that he does with the Najarian brothers. It was a cute moment, but my time speaking with Seth Freudberg meant more to me. I’d been working on meeting him for about six months.
Posted on 1/17/24 at 3:29 pm to Jag_Warrior
Did anyone happen to grab shares (or play long options) of our mothership CBOE?
Broke through another 52 week high today and stands at 187.13.
Earnings due 2/2 before the open.
Broke through another 52 week high today and stands at 187.13.
Earnings due 2/2 before the open.
This post was edited on 1/17/24 at 3:33 pm
Posted on 1/17/24 at 4:27 pm to Jag_Warrior
I did not! Maybe it will be an earnings play
Posted on 1/17/24 at 6:52 pm to LSUtoOmaha
Maybe… hopefully.
The major hiccup in primarily using cash secured puts as a means to go long on a desirable equity… if/when that equity goes into an uptrend, ya don’t gets no stock!
So (for now), I put CBOE on the list with PAG and IBM as opportunities missed.
The major hiccup in primarily using cash secured puts as a means to go long on a desirable equity… if/when that equity goes into an uptrend, ya don’t gets no stock!
So (for now), I put CBOE on the list with PAG and IBM as opportunities missed.
Posted on 1/18/24 at 12:00 pm to Jag_Warrior
How are you doing with 0 DTEs? I tried one iron condor with short legs at 10 delta and got absolutely rocked..lost $920 for $80 in premium.
I currently have short put positions on with GOOGL, AMZN and TQQQ, one to three months out
I currently have short put positions on with GOOGL, AMZN and TQQQ, one to three months out
Posted on 1/18/24 at 4:35 pm to LSUtoOmaha
Still trading them. But when IV was rock bottom, my positions were lighter. Glad to see the VIX stumbling back above 14 again.
I know what you mean. The issue with the short premium 0-1DTEs in this low IV environment, to get some juice you get tempted to do the 10+/- delta trades. And they work… til they don’t. And when they don’t, Higgins has both Zeus and Apollo run you down.
In my investment account, I’ll likely do some short options on AMZN, GOOG, etc. too.
I know what you mean. The issue with the short premium 0-1DTEs in this low IV environment, to get some juice you get tempted to do the 10+/- delta trades. And they work… til they don’t. And when they don’t, Higgins has both Zeus and Apollo run you down.
In my investment account, I’ll likely do some short options on AMZN, GOOG, etc. too.
Posted on 1/18/24 at 7:34 pm to Jag_Warrior
How wide are your strikes? I assume you're doing condors
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