i am more or less done with IB... their obnoxious exposure fee which is mandatory and in my case for a sample position of 100 naked SPY puts/calls it used to be 20 bucks a day increased slowly to 30-40 bucks wasnt charged on weekends. but now is compulsory so i pay on weekends also that was the straw on the camels back.... i stuck to IB due to Portfolio margin and low fees.. i moved to eoption its fees are lower than IB.. if u do more than 10 contracts each trade.. ( its says 15 cents flat but . with OCC and other fees its 25 cents. ballpark. plus 3$ flat) one thing i liked at IB was . if you have a 1 cent priced option. there is no commission to close it... anyways.. so my orignal question. is.. i have close to 2000$ YTD exposure fee.. it is due to holding weekly naked SPY puts/calls . IB doesnt give u a breakout. so how the F@%@^ am i supposed to itemize it against each of the trades i did.? there is no way. i am NOT going to factor this in.. as it is a REAL fee.. just like commissons. which eat into your income and i need get my income reduced before i filed taxes.. someone suggested. at End of year.. take all your trades and spread the 2000 $ over them and modifiy the cost basis.. assumeing i am audited, will i be able to explain this to the IRS auditor?
Do you qualify as a "trader" in terms of IRS law? If so, you can include it as a business expense. If you don't, it is possible it might be classified as interest expense which would not give you full benefit. I am just guessing and am not a tax expert.
Business expense if you're an active trader would be easiest. If you think it's mainly due to your naked options, maybe add it to the basis on a per contract basis for all the trades over the year? Some expenses are capitalized into basis, like short dividend expenses for shorter term trades which seems similar in the case of front month options. Form 8949 has a place for adjustments to basis, since brokers often get things wrong. If they audit you, it's not like this is unreasonable so it's probably not a big deal anyway. is it correct - who knows? Not me. maybe it's supposed to go somewhere else - investment interest expense like margin, investment non-interest expense like newsletters, negative interest adjustment, etc. Good luck.
THANKS.. THAT IS WHAT i WILL DO.. I WILL ADJUST MY BASIS AT THE END OF THE YEAR .. ok.. here is my update.. i have moved to eoptions.. i dont have portfolio margin.. ( which may be a good thing as leverage is a double edge sword) so i am selling lesser contracts. I do karen super trader style. selling OTM puts and call on SPY.WEEKLY... .try to keep it simple.. the stupid eoption. software... they dont allow u to sell strangles. which different expirys. in IB it is best of its class trading software.. i have to admit... u can sell puts and then sell calls and they know exactly how to take margin eoption. i had to call several times ans then said - if i sell for the same expiry. maybe their software will work.. if not i have to call and place my order PITA. their fees -commisson.. since a 3 $ flat.. and 25 cents each.. so >5-6. contracts.. is cheaper.. in eoption as compared to IB.. and no goddamn EXPOSURE FEE.... hell YAY.. i will stick around for some time.. but may have to move back to IB.. eventually since I need to have the quick ability to sell Calls when i see the opportunity.