Ok, so I read a book on options investing and wrote my first covered call. I bought 100 shares of ISRG at 243.9799I sold one contract in ISRG at 21.30Somehow I missed the knowledge that the option would be automatically exercised if it's in-the-money at expiration. So I'm confronted with the choice between buying the option back or allowing it to be exercised. The current price of ISRG is 301.82 and the option is 58.10. Essentially it would cost me 36.80 to buy the option back. If I add that to the basis cost, I would be holding 100 shares of ISRG at a gain of 21.04, which would be no bad thing as it's a good stock. Alternately I could allow it to be exercised and be 26 cents ahead. I'm inclined to buy the option back but wanted a clarification on the pros/cons since I'm not sure I have a complete understanding of the strategy I was trying to employ. Question: Do I get to claim the short-term options loss as a loss on my taxes and hold the stock longer to claim the lower tax rate on long term capital gains? Or does it literally change my cost basis for the stock holding?Thanks. Michael
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