Q: Here is what Taxtips.ca gives as a reason for not selling options:
We traded options for about a decade, and in the end finally decided to quit, because
bullet there was too much record keeping to be done
bullet we always had to keep on top of whether the stocks were close to exercise price
bullet when we used a full-service broker, it seemed we would be warned before anything was exercised and that we could have some input, but once we used a discount brokerage options would be exercised without warning, and we would find out after the fact.
bullet it was impossible to quantify true gains and losses, and it certainly didn't seem worth all the effort we put into it
They undoubtedly know more than I do but I find their analysis a little extreme. Wondering what you think of it.
I was looking at their site in order to get an idea about paying taxes on options. wasn't really clear to me. My question is whether you pay capital gains on the stock, not the option premium, but the stock capital gain, when you buy back a call option?
thanks
We traded options for about a decade, and in the end finally decided to quit, because
bullet there was too much record keeping to be done
bullet we always had to keep on top of whether the stocks were close to exercise price
bullet when we used a full-service broker, it seemed we would be warned before anything was exercised and that we could have some input, but once we used a discount brokerage options would be exercised without warning, and we would find out after the fact.
bullet it was impossible to quantify true gains and losses, and it certainly didn't seem worth all the effort we put into it
They undoubtedly know more than I do but I find their analysis a little extreme. Wondering what you think of it.
I was looking at their site in order to get an idea about paying taxes on options. wasn't really clear to me. My question is whether you pay capital gains on the stock, not the option premium, but the stock capital gain, when you buy back a call option?
thanks