B
bpj
I am not liable to any U.S. tax on income from trading futures. My country of residence has its own stupid rules. Therefore I cannot see how to do achieve my goal with only a single futures contract
B
bpj
You made me confused. OTE can be used for margin purposes, can it not? So, if it is all calculated in real time, then unrealized gains on the other leg of the spread should still allow me to re-open the losing leg
No FCM is going to give you spread margin credit if you’re wantonly opening and closing spread legs as you’ve described throughout this thread in your posts. That Risk Manager is going to margin you at full outright risk or considering your account equity liquidate your position and close your account for you.
Legitimate, proper spread traders who’ve earned the right to enjoy substantial spread SPAN margin credits open then close spread leg positions simultaneously.
B
bpj
If an FCM claims they allow SPAN margin credits, then surely they are automatically applied by default as specified by CME. So, it should work
Assuming I have $100k cash in the account:
10 long Nikkei YEN eats up $48k,
adding 9 short Nikkei USD reduces the required total margin to about $2k.
After a while, Nikkei YEN is showing a $50k profit, Nikkei USD - a ($50k) loss.
Closing Nikkei USD to book the loss -> equity of the account remains at $100k, so it has enough margin for Nikkei YEN outright position and allows me to immediately reopen Nikkei USD to get back into spread.
Come new tax year, I close both legs and am back at $100k in cash and a "loss" of ($50k) booked in the previous tax year.
Assuming I have $100k cash in the account:
10 long Nikkei YEN eats up $48k,
adding 9 short Nikkei USD reduces the required total margin to about $2k.
After a while, Nikkei YEN is showing a $50k profit, Nikkei USD - a ($50k) loss.
Closing Nikkei USD to book the loss -> equity of the account remains at $100k, so it has enough margin for Nikkei YEN outright position and allows me to immediately reopen Nikkei USD to get back into spread.
Come new tax year, I close both legs and am back at $100k in cash and a "loss" of ($50k) booked in the previous tax year.
B
bpj
Will it not be shown in the REALIZED P&L line of the daily statement? Why?
B
bpj
I do not get your point. I lost that $50k as I closed the position which will be shown in my daily statement.
In the new tax year however, I will close the winning leg booking the profit in this new tax year.
The market went down -> I took a loss in Nik USD. Booked. Shown in the statement.
Almost the very same moment reopened long Nikk USD while keeping the short Nikk YEN (which is showing a positive open-trade equity).
New tax year:
The market went down even more -> Booked another loss in Nikk USD AND booked the profit in Nikk YEN approximately equivalent to the total loss in Nikk USD (from the previous year and current year).
I am trying to think if this can go wrong so appreciate your comments. Thank you.
In the new tax year however, I will close the winning leg booking the profit in this new tax year.
The market went down -> I took a loss in Nik USD. Booked. Shown in the statement.
Almost the very same moment reopened long Nikk USD while keeping the short Nikk YEN (which is showing a positive open-trade equity).
New tax year:
The market went down even more -> Booked another loss in Nikk USD AND booked the profit in Nikk YEN approximately equivalent to the total loss in Nikk USD (from the previous year and current year).
I am trying to think if this can go wrong so appreciate your comments. Thank you.