SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
You do not HAVE to list every leg of every trade. You can aggregate the trade. BUT, I choose to keep a spreadsheet showing the legs and attach my trades to the return. The more documentation sent with your return, the less likely an audit.
Go to www.tradersaccounting.com. They have a fabulous Excel spreadsheet which lays out all the computations for you. I make my entries daily, balance against my trade confirms. Then simply print it out.
If you don't track like this, how do you keep track?
For SPX options trading, last year and from first glances this year, you just have to report totals by account in part 1 on Form 6781. It may be more complicated if you use index options in combination with other instruments that are not 1256 contracts. I believe that in years prior to 2004, Form 6781 required each individual contract to be specified.
Oops, I just looked at the directions and it says individual transactions if you don't have a 1099-B from your broker detailing the amount. I don't think I have gotten 1099-B's in the past. Perhaps, I filed wrong last year although I am not going to lose much sleep over it--since I have the back-up if the IRS questions it.
Chip
OptionVue5 has a really good portfolio tracker that works well for me.
You do not HAVE to list every leg of every trade. You can aggregate the trade. BUT, I choose to keep a spreadsheet showing the legs and attach my trades to the return. The more documentation sent with your return, the less likely an audit.
Go to www.tradersaccounting.com. They have a fabulous Excel spreadsheet which lays out all the computations for you. I make my entries daily, balance against my trade confirms. Then simply print it out.
If you don't track like this, how do you keep track? [/QUOTE]
You do not HAVE to list every leg of every trade. You can aggregate the trade. BUT, I choose to keep a spreadsheet showing the legs and attach my trades to the return. The more documentation sent with your return, the less likely an audit.
Go to www.tradersaccounting.com. They have a fabulous Excel spreadsheet which lays out all the computations for you. I make my entries daily, balance against my trade confirms. Then simply print it out.
If you don't track like this, how do you keep track? [/QUOTE]
I am a bit puzzled why some prices are there on option chainsI will give an example. SPX is say at 1283 and I am looking at Feb put option chain. Prices at strike price 1500 is 212.40/214.40.What use can one make of these prices.
If you sell at 212.40 will you be exercised immediately. If you buy can one make any profit?These price quotes in my opinion are useless. Please some body throw some light on this. Thanks
If you sell at 212.40 will you be exercised immediately. If you buy can one make any profit?These price quotes in my opinion are useless. Please some body throw some light on this. Thanks
Hey all, you guys were busy as I was out the past two days lol.
Let me catch up on all the comments.
As fro SPX v. XEO, whether you look at number of strikes or % OTM, the SPX gives your more choices and flexibility than the XEO so I still perfer to do credit spreads on the SPX.
Options on futures, the jury is still out for me. Like many of you, since I use OX and ToS I do not have access to them so any review of them is academic since I do not have access to trade them. That should change in a few months if I move some money into an option prop shop where I will have access to them. However I still feel their value comes in as hedging vehicles potentially.
Taxes, I think if you list each leg separately or list it as each spread, you should come out with the same net gain or net loss which is taxable. I create a spreadsheet of the spreads and attach it with my taxes to the appropriate Schedule and simply list the net gains taxable as short-term gains or whereever my accountant puts it (I am happy to let him handle the tax knowledge and stick with trading and JA) and it seems to work fine. The answer is the same so I doubt it would make the IRS ask me to do it over as legs. But you have to talk with your accountant.
If you use OptionsXpress, the account summary is already broken out in legs and has the totals. Simply dump that into a spread sheet and viola.... you are finished in 10 minutes
. One great thign about OX and tax time. Makes it a breeze to dump that into a spreadsheet.
Let me catch up on all the comments.
As fro SPX v. XEO, whether you look at number of strikes or % OTM, the SPX gives your more choices and flexibility than the XEO so I still perfer to do credit spreads on the SPX.
Options on futures, the jury is still out for me. Like many of you, since I use OX and ToS I do not have access to them so any review of them is academic since I do not have access to trade them. That should change in a few months if I move some money into an option prop shop where I will have access to them. However I still feel their value comes in as hedging vehicles potentially.
Taxes, I think if you list each leg separately or list it as each spread, you should come out with the same net gain or net loss which is taxable. I create a spreadsheet of the spreads and attach it with my taxes to the appropriate Schedule and simply list the net gains taxable as short-term gains or whereever my accountant puts it (I am happy to let him handle the tax knowledge and stick with trading and JA) and it seems to work fine. The answer is the same so I doubt it would make the IRS ask me to do it over as legs. But you have to talk with your accountant.
If you use OptionsXpress, the account summary is already broken out in legs and has the totals. Simply dump that into a spread sheet and viola.... you are finished in 10 minutes
. One great thign about OX and tax time. Makes it a breeze to dump that into a spreadsheet.The ability to get cross margin with options, futures and options on futures and haircuts will allow me go slightly bigger PLUS reduction of haircuts as I add hedges. And with corss margin I have more tools to use for hedging purposes to dynamically hedge my risk. Also direct access to the pits for SPX. Not to mention commissions below $1.00 per contract and interest on credits.
Adding all that together, it beats retail for me. I need every advantage I can get
Adding all that together, it beats retail for me. I need every advantage I can get