08-31-2018, 10:56 AM
(This post was last modified: 09-01-2018, 11:37 PM by crimsonghost747.)
I've tried them a couple of times in the past and recently I've looked into starting this again. I see two risks with the strategy mentioned. The small one being that the stock never drops and then you end up missing out on it, or potentially purchasing it later on at a higher price. The big one being that you end up buying a stock significantly above it's current valuation.
Another way to play it would be to try to sell the options with the intention of not getting it assigned and simply profiting from the premium.
as for the taxation: I can't answer how it goes in the USA. But I don't see why it would be any different. You sell an option for X dollars, and then you basically buy it back at $0.00 since it expires worthless. So you made X dollars of profit on a short term trade... so should be same taxation as any other short term trade, right? If you sell a put which gets assigned, then the shares appear on your account and the buy price will be the strike price of the option.
Another way to play it would be to try to sell the options with the intention of not getting it assigned and simply profiting from the premium.
as for the taxation: I can't answer how it goes in the USA. But I don't see why it would be any different. You sell an option for X dollars, and then you basically buy it back at $0.00 since it expires worthless. So you made X dollars of profit on a short term trade... so should be same taxation as any other short term trade, right? If you sell a put which gets assigned, then the shares appear on your account and the buy price will be the strike price of the option.