if you're long SPY and the inverse SPY etf is that considered "against the box"?

I

IronFist

i forgot the ticker of the inverse SPY but if you own that and SPY is that considered shorting "against the box?"

what if you own SSO and the 1x inverse SPY?
 
Quote from IronFist:

i forgot the ticker of the inverse SPY but if you own that and SPY is that considered shorting "against the box?"

what if you own SSO and the 1x inverse SPY?
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If the purpose of that is to avoid taxes or transfering money from one account to another laws are writen in such a way that they can cought you if they want.
 
Quote from total_keops:

If the purpose of that is to avoid taxes or transfering money from one account to another laws are writen in such a way that they can cought you if they want.
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"they can cought you"... :confused:
 
Quote from stock_trad3r:

no it isn't against the box. To be against the box you would have to be long & short the SPY.
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isn't that essentially what you're doing tho?

or it has to be the same actual ticker symbol?
 
If your are in the US, I don't think that would be "against the box" as defined by IRS. It sounds like it may be more like the generalized definition of a "straddle" as described in page 58-59 of the 2008 IRS Publication 550.

Personally, the wording in that publication does not give enough examples, so the potential to make an 'honest mistake' is there. I am sure the new Treasury Secretary Geitner will be lenient if you honestly misinterpret the definition.:D
 
SSO is an ETF attemptng to match 2x long S&P 500 and SDS is short 2x S&P 500 and SPY is an ETF that tracks the SP 500. 3 different securities.
 
Quote from Trading4Alpha:

The IRS language does not say anything about "different securities." It refers to "the same or substantially identical" securities for exactly this reason. Rather than test for the equivalence of stock symbols, the IRS looks at so-called "constructive sales" that remove one's risk of loss in the security (including the use of futures or options positions). If the investor, the IRS, and the tax court consider long SH to be "substantially identical" to shorting SPY or that buying SH removes ones exposure to loss in SPY, then the IRS will win.
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So with that interpretation, would the following be considered a "straddle" and need to be filled out in Section II of Form 6781?

1. Vertical Option Spreads
2. Butterflies/Condors/Strangles/etc
3. Futures spreads (Crack, Crush, etc)
 
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