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Started By
Message
Potential strategy for Monday? Is this sound?
Posted on 3/15/20 at 11:09 am
Posted on 3/15/20 at 11:09 am
I put $250 into SPXL on Friday morning. At close on Friday, thanks to the run, it made $42.
I’m expecting the market to trend down on Monday. If I can pull my investment early enough, I can have $292 to invest at another date.
Now there’s the issue of settled and unsettled funds and also short term capital gains. This is mostly the area I’m trying to learn.
So what obstacles am I facing with this plan? It’s through eTrade which I believe has a 0% fee for trading. It’ll be the only movement I make over a 5 day period outside of reinvesting it when it looks good again.
*This is just for learning and play. Not a long term or crucial investment.
I’m expecting the market to trend down on Monday. If I can pull my investment early enough, I can have $292 to invest at another date.
Now there’s the issue of settled and unsettled funds and also short term capital gains. This is mostly the area I’m trying to learn.
So what obstacles am I facing with this plan? It’s through eTrade which I believe has a 0% fee for trading. It’ll be the only movement I make over a 5 day period outside of reinvesting it when it looks good again.
*This is just for learning and play. Not a long term or crucial investment.
7
Posted on 3/15/20 at 11:14 am to StringedInstruments
I would be careful unless you're going to continue trading and plan on losing it(tax write off) or keep going(make enough to make this type of thing profitable.
if you were to make larger moves and make this type of return you might accidently owe quite a bit in taxes. you'd owe capital gains off the $42 dollars though in this instance when you file taxes next year.
if you were to make larger moves and make this type of return you might accidently owe quite a bit in taxes. you'd owe capital gains off the $42 dollars though in this instance when you file taxes next year.
Posted on 3/15/20 at 11:18 am to oklahogjr
So the capital gains is based off of movement rather than net over the year?
So for example, I make some genius moves and make $1000 in gains over the year (with multiple instances of pulling and reinvesting). But by the end of the year, the market tanks or I make poor moves and my investment is worth $50 total.
I still pay taxes on the $1000?
So for example, I make some genius moves and make $1000 in gains over the year (with multiple instances of pulling and reinvesting). But by the end of the year, the market tanks or I make poor moves and my investment is worth $50 total.
I still pay taxes on the $1000?
This post was edited on 3/15/20 at 11:19 am
Posted on 3/15/20 at 11:25 am to StringedInstruments
quote:
I still pay taxes on the $1000?
Depends if you sold that poor move or are still holding on to it.
Posted on 3/15/20 at 11:25 am to StringedInstruments
quote:
I still pay taxes on the $1000?
No, you report a loss of whatever your initial investment was minus $50. Losses can accumulate and rollover from year to year on your returns until you finally go in the positive.
Posted on 3/15/20 at 11:26 am to StringedInstruments
You pay taxes on the net gain, not per trade.
Posted on 3/15/20 at 11:27 am to StringedInstruments
You pay taxes on your net realized gains (or losses).
So it all adds up at the end of the year. Again, they must be realized so it only matters if you actually sell your holdings. Meaning if you make $1000, reinvest it, and that investment tanks but you continue to hold it, you WILL still owe taxes on the $1000 realized gains.
So it all adds up at the end of the year. Again, they must be realized so it only matters if you actually sell your holdings. Meaning if you make $1000, reinvest it, and that investment tanks but you continue to hold it, you WILL still owe taxes on the $1000 realized gains.
Posted on 3/15/20 at 11:28 am to StringedInstruments
In the long run, this is not going to work out for you. That's just how it is
Posted on 3/15/20 at 11:38 am to StringedInstruments
quote:
So the capital gains is based off of movement rather than net over the year?
No. it's netted over the year and there is definitely some loss rollover but limits to losses you claim in a year.
but this is on realized amounts not based on like account size or holdings.
So once you sell and it's locked in that you did poorly you're good. as long as you're still invested it's treated like you made 1k.
So the more transactions the more complicated think of it like this:
Starting amount: $100
You Invest this amount and it grows to $150 overnight.
if you sell now you will realize the gain of $50.
If you hold then you don't owe any capital gains tax.
Now you go ahead and sell to realize the gain of 50.
Now reinvest everything, So you have 150 invested.
if you don't sell for rest of year you owe taxes on $50 regardless of the price of your investment.
if you cash out this second investment you'll realize a gain or loss depending on size. and owe more or less taxes at end of year potentially.
Disclaimer: i'm not a tax expert this has just been my experience with trading. not covered are things like factoring in short vs long term capital gains costs into things, rolling over large losses, etc. This can be a nightmare I assume depending on what you're trading where and how.
This post was edited on 3/15/20 at 11:41 am
Posted on 3/15/20 at 11:40 am to oklahogjr
That makes sense.
Posted on 3/15/20 at 11:42 am to StringedInstruments
Capital gains are on net profit at the end of said tax year. E-Trade. my long-time trading platform, will issue a statement to you at some point next Feb. It will be available online within your account.
Posted on 3/15/20 at 11:50 am to StringedInstruments
Make sure to consider wash sale rules or you may not be able to use losses to offset gains.
Posted on 3/15/20 at 12:01 pm to TorchtheFlyingTiger
quote:
wash sale rules
Added another key term to the vocabulary list.
This post was edited on 3/15/20 at 12:01 pm
Posted on 3/15/20 at 12:03 pm to StringedInstruments
The market will already be down when it opens. You will probably have lost your gains
Posted on 3/15/20 at 12:13 pm to StringedInstruments
I know what I'm about to write will sound like I'm being hypercritical of you so I apologize in advance.
If you're so uninformed about capital gains and losses tax laws as you seem to be, maybe trading stocks is not a good idea for you.
Tax impacts on gains and losses is an integral part of investing strategy, especially short-term investing.
Start with learning about taxes on wash sales.
If you're so uninformed about capital gains and losses tax laws as you seem to be, maybe trading stocks is not a good idea for you.
Tax impacts on gains and losses is an integral part of investing strategy, especially short-term investing.
Start with learning about taxes on wash sales.
Posted on 3/15/20 at 12:26 pm to StringedInstruments
That will also be shown..unless you change your accounting method, deductions on losses are limited to $3K per annum.
You will file a Scgedule D.
You will file a Scgedule D.
Posted on 3/15/20 at 12:33 pm to LSURussian
quote:
If you're so uninformed about capital gains and losses tax laws as you seem to be, maybe trading stocks is not a good idea for you.
Tax impacts on gains and losses is an integral part of investing strategy, especially short-term investing.
Can someone learn how the slot machines truly work without putting a quarter in?
It’s $250. There’s no harm here and it’s not like I’m going to accrue earnings that actually impact my taxes.
Posted on 3/15/20 at 12:38 pm to StringedInstruments
quote:fwiw, this is a bad mindset to have.
It’s $250.
There are free fake investing sites out there. Use that instead.
Posted on 3/15/20 at 12:42 pm to StringedInstruments
quote:Yes.
Can someone learn how the slot machines truly work without putting a quarter in?
Posted on 3/15/20 at 12:48 pm to SalE
Excuse the typo..didn't have my glasses on.
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