Series 4

AAA

Option Taxation And Margin Requirements - Protective Puts

An investor who has purchased a protective put on a stock held less than 12 months will cap the holding period for that stock at 12 months and will have a short term gain or loss on the sale of the stock. If the stock was held for more than 12 months before purchasing the put, any gain or loss will be long term. Married puts purchased on the same day as the stock will not automatically create a short-term gain or loss for the stock so long as the puts are identified as a hedge or as married puts when the order is executed. If the put expires, the put’s premium is added to the stock’s cost base.



Securities Training



Covered Calls
comments powered by Disqus
Related Articles
  1. 7 Steps To Evaluate A Financial Adviser
    Investing Basics

    7 Steps To Evaluate A Financial Adviser

  2. Buy Side Vs. Sell Side Analysts
    Professionals

    Buy Side Vs. Sell Side Analysts

  3. What You Need To Know About Financial ...
    Insurance

    What You Need To Know About Financial ...

  4. Trying On Potential Employers
    Professionals

    Trying On Potential Employers

  5. Introduction To Financial Planning Organizations
    Personal Finance

    Introduction To Financial Planning Organizations

Trading Center