That's one hypothetical. Throw Section 1256 contracts and their special loss carry-back provisions into the mix (and assume the trader's strategy goes cold again) and he might get a tax refund from his year with the big wins. And he will keep guys like your father very busy.
We live in florida. No big accounts here trading derivatives really... mostly retirees looking at under performing structured products.... because losing your money to inflation isn't as risky as equity to them.... maybe they are right... but those high paying prudential products are the talk..... I wish the long vol set up was discussed more... it interests me... be nice to get long in wings in some efficient way... its the bleeding to death people can't handle ... not the sudden quick death by blow up.... its like.. idk weird...
You get carry forward on your losses. So if you lost 100k a year for three years and made 400k the fourth year you pay taxes on just 100k on the fourth year. Each state is different though.
but the second year you will be shown the door if you are a pro and if you are a home gamer you will prob back off size or just give up ? Plus the tax laws can change overnight? sle- do you trade teenies or more about option "structure" ? Your not a underlying directional trader in other words ? thnx
I would not know ?? Direction of the vix isnt correlated with market direction but it is a guess on "something " ?
Truth is, I do trade every style (have some delta strategies too), but don't really do proper "AAPL will go up tomorrow" kind of trading. However, in most cases I like being balanced risk premium - if I am collecting theta some place, I want to buy some protection elsewhere.
Questions for everyone. I'm reading a couple of books now which advise basing entries on current IV in relation to historical IV. For example with strategies that benefit from low volatility, they are looking at IV and not the current volatility of the underlying vs historical volatility. Does anyone do this and if so do you subscribe to any data source that gives historical IV data? Which source?
historical IV can very easily be calculated... thats just the realized vol of the underlying.. if you can get histrical data on the underlying its very simple to come up with a HV number.. theres much more to getting a good representation of what the underlying is experiencing... Garch is one of them... another thread we were talking about scaling HV numbers by the square root of time.. and how information is lost when volatility is aggregated.. meaning larger moves get smoothed out.. and when you take those aggregated numbers and scale by the square root of time your getting an actual larger number representing the daily or weekly vol then it should be.. hope i explained that right...