Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121592  
Subject: Re: Tax Implication: Close Option and Sell Stock Date: 7/21/2011 4:48 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Background: A little over a month ago, I sold IDCC Sept 2011 $40 calls (when the stock was at $35-37 range) to protect against an unfavorable ruling against NOK. I have the same number of shares at a cost basis @ $25 or so. So in effect, the call is a covered call. Needless to say, today, my stocks have more than tripled in value, but my options are keeping up pace and negated all that nice jump. Overall, have a 60% gain (over many years - held IDCC since '05 I think, which translates to 7-9% annual return), so am not losing money BUT extremely sad to have missed out on this. Another red-flag on my investing style - first NFLX, now this. Haven't mastered the art of selling as much as buying in.

Desired Goal: Anyway, I want to close my option position and sell my shares on the same day as two separate transactions because my stock gains are long-term, and my option losses are short-term.



you want to do this NOW?

i'm fairly sure that the 'things' are different enough that Wash sale.

but you might consider holding till Sept and letting the options be exercised.

the price you got for the options will decrease the basis, and you'll have one long term gain and one commission (vs long-term gain, short term loss and two commissions)

[ i sell covered calls, but generally either buy back and keep the stock or let them expire worthless. ]
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement