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Author: scweston Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Wash Sale: Stock & Options Date: 12/7/2000 11:45 AM
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One question I haven't seen answered.

I know that wash sale rules apply both to stock & to options. However, what about the following scenario;

I own 100 shares of XYZ purchased 6 months ago which is 50% down. I want to sell & take the tax loss for a capital gains offset. However, I like the stock & think it will start increasing slowly. Rather than waiting 30 days & then buying back I'd like to use an option to BUY an APR 40 CALL immediately. That way I can just get back in at todays depressed price anytime from 30 days from the sell date of my actual stock & April.

The question is therefore whether buying an option within 30 days of selling actual stock counts under the wash sale rules or are stock trades & option trades treated separately ? Obviously I will have to wait 30 days from the stock sell date before I could exercise the option, right ?

Thanks,

Simon
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Author: zman49 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42608 of 121095
Subject: Re: Wash Sale: Stock & Options Date: 12/7/2000 2:06 PM
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Simon,

The wash sale rules explicity say that buying a call option (within 30 days of a sale for a loss) does create a wash sale. You would have to add the loss on the 100 shares to the cost of the option instead of realizing the loss as of the day you sold the stock.

Good Luck,
Z

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