I am not a CPA or lawyer, but in my operating agreement I specifically put in wording that stated what my business does and specifically mentioned buying and selling stocks. I am not sure if that is required but I just wanted to cover my bases. Plus if you plan on trying to write off business expenses, they better be tied to what your business claims to do, and even then I would review the IRS website on what exactly you can write off. As far as tax filing goes, if you are a single member LLC, then as stated by other respondents, the IRS doesn't really recognize your entity and your trades go through on your personal return. However you can elect to be taxed as an S Corp, which would require you to file a separate tax return for your business and your trades and expenses would go on that return and you would issue yourself an K-1. As far as offsetting losses and gains go, I am not sure on how exactly that works in terms of taking huge losses. Business losses might not be able to offset capital gains, but once again I am not a CPA and I am not sure on the specifics. You might want to be careful though, because your state might have a minimum tax on corporations, so even if you have a net loss in trading for the entire year, you might still have to pay minimum corporate taxes if you elect to be taxed as an S Corp. If you are not a net profitable trader then the costs can add up quickly. Say you lost $5k on the year trading the ES, you could still owe a minimum corporate tax ($250 in my state), also have to renew your business filing with the state ($100 in my state), possibly pay someone to prepare your business taxes for you, and most likely will have costs associated with operating the LLC if say you chose to open a business checking account and want fancy business checks to show your friends or something like that. So you should think long and hard if forming the entity is worth it in the long run. If you are a profitable trader and value the benefits of an LLC over the costs, then go for it, but just make sure you do all of your research before going in.