Time decay is exponential so it is greater in the last 30 to 40 days. WIth 29 days to expiration and those APR strikes being way OTM, the premium is much less as a result of theta and lower deltas, and not to mention the IVs are slightly lower than the MAY expirations. It is not a probability issue really in the pricing but some good old fashioned Greeks.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Hey coach,
I don't want to litter your thread with advantageous trading entities, but real quick, I know u disscused this a little while ago.
Obviously the caveat "contact a CPA or tax attorney applies".
Would it be more advantagous for me to put my trading account in my LLC? I have an insurance agency and never really thought about putting my trading account in the LLC. Thoughts?
I don't want to litter your thread with advantageous trading entities, but real quick, I know u disscused this a little while ago.
Obviously the caveat "contact a CPA or tax attorney applies".
Would it be more advantagous for me to put my trading account in my LLC? I have an insurance agency and never really thought about putting my trading account in the LLC. Thoughts?
No just APR put spreads. I do have an APRIL/MAY diagonal position and that so far is my credit spread on the call side.
With the disclaimer of "consult an attorney or CPA" aside, the question really depends on what tax advantages you may have from doing so. An LLC is limited liability but since you are trading alone, I doubt liability is an issue unless you might sue yourself for a long trade that went sour.
Tax issues depends on what status you elect as a trader and whether you are getting a significant amount of income from trading. Basically tax issues there.
As for your insurance agency, are you saying you wish to shield your investment assets from liabilities arising from your insurance work? IN that case the limited liability entity is needed in the insurance business formation not in the trading side. Since you own the LLC it would be an asset of yours and if you did your insurance agency as a sole prop, it would be an asset attachable in a a personal action against you. So if this is true, then do the insurance business through a C-corp or LLC (LLC my preference for ease).
If I have not confused the issue thoroughly then ask again and I can try harder lol...
Tax issues depends on what status you elect as a trader and whether you are getting a significant amount of income from trading. Basically tax issues there.
As for your insurance agency, are you saying you wish to shield your investment assets from liabilities arising from your insurance work? IN that case the limited liability entity is needed in the insurance business formation not in the trading side. Since you own the LLC it would be an asset of yours and if you did your insurance agency as a sole prop, it would be an asset attachable in a a personal action against you. So if this is true, then do the insurance business through a C-corp or LLC (LLC my preference for ease).
If I have not confused the issue thoroughly then ask again and I can try harder lol...
I guess it's just a personal preference, then. My E&O insurance would cover most insurance errors, but I guess I would like that extra layer of protection if a client were to sue me for whatever reason. Thanks for your input, much appreciated.
Pimp
Coach,
I am looking at establishing a trading LLC within 30 days. From what I have read I am considering a two persom LLC, my wife and my self, as a gaurd against penetration. I will estabish a new option account at TOS and then close my existing account and use these funds to fund the LLC account. Does this seem like a reasionable approach?
Thanks
George
I am looking at establishing a trading LLC within 30 days. From what I have read I am considering a two persom LLC, my wife and my self, as a gaurd against penetration. I will estabish a new option account at TOS and then close my existing account and use these funds to fund the LLC account. Does this seem like a reasionable approach?
Thanks
George
Again I also must answer these questions with a caveat that you should always contact a CPA.
I think your question states a misconception. First what penetration are you looking to avoid using an LLC? Remember an LLC gives limited liability from those the LLC does business with or conducts activities which could raise liability. So a business in an LLC form is shielded from liability from customers beyond that of capital in the LLC.
However if you are sued on something else (your car kills someone), and you are liable, all your assets are attachable. Your ownership in the LLC is an ASSET and therefore attachable and is worth the value of your investments. An LLC does not shield your liability or protect those assets from suits unrelated to the business of the LLC.
Here is a better analysis. Your car kills someone and you are sued and lose and all your assets are attached. You own 1000 shares of IBM. IBM is a limited liability entity but they are going after your shares of IBM, not IBM itself. So you would have to surrender your shares of IBM as an asset you own just like your car, house, etc...
So before you form an LLC you should really understand what it means and what the tax implications are. However one thing I can tell you is that an LLC will not shield you from liability on anything outside of the LLC. And since you and your wife are both the members trading for yourselves, you are not open to any liability because you are just trading your own account.
Hope this is clear
I think your question states a misconception. First what penetration are you looking to avoid using an LLC? Remember an LLC gives limited liability from those the LLC does business with or conducts activities which could raise liability. So a business in an LLC form is shielded from liability from customers beyond that of capital in the LLC.
However if you are sued on something else (your car kills someone), and you are liable, all your assets are attachable. Your ownership in the LLC is an ASSET and therefore attachable and is worth the value of your investments. An LLC does not shield your liability or protect those assets from suits unrelated to the business of the LLC.
Here is a better analysis. Your car kills someone and you are sued and lose and all your assets are attached. You own 1000 shares of IBM. IBM is a limited liability entity but they are going after your shares of IBM, not IBM itself. So you would have to surrender your shares of IBM as an asset you own just like your car, house, etc...
So before you form an LLC you should really understand what it means and what the tax implications are. However one thing I can tell you is that an LLC will not shield you from liability on anything outside of the LLC. And since you and your wife are both the members trading for yourselves, you are not open to any liability because you are just trading your own account.
Hope this is clear
I think people are getting the issue of liability backwards. If you form a limited liability entity, a personal (unrelated to the business) lawsuit can still go after your share of the company. But a business related lawsuit cannot go after your personal belongings.
On the other hand, if you are trading under a partnership or sole proprietor, your part of the company is still vulnerable in a personal, unrelated lawsuit. And in addition that, in a lawsuit related to activities of your business your personal belongings are now vulnerable too.
On the other hand, if you are trading under a partnership or sole proprietor, your part of the company is still vulnerable in a personal, unrelated lawsuit. And in addition that, in a lawsuit related to activities of your business your personal belongings are now vulnerable too.