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Hello Tax Experts!!!

I have been writing deep out of the money 25 day 'till expiration calls on a volitile stock that I plan to hold for a long time. I'm writing the calls simply 'cause they're there, and they help to smooth the volitility. To date, all of the written calls have been well out of the money.

However, this month I have problems. The stock price is nicely above the highest available strike for the month. That's a good thing, except for the fact that it is unlikely to stay there due to the volitility.

If I write the highest available strike call, with less than 30 days to expiration, it will be considered a qualified write, and my holding period will be suspended for the remaining life of the option, right? As long as the strike is the highest available, then my holding period will not be terminated due to the "deep in the money" characteristic of the write, correct?

I'm not concerned about the suspension of my holding period, but the termination of such is a problem.

Let me know if I've got this right...


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