I'm a little cloudy on how the tax is treated. Here's a couple examples: If you sell a put and hold it for over a year and it expires worthless, the premium is considered long-term gain, right? If you sell a put and hold it for over a year but you buy to close it early instead of letting it expire, it is now short term tax, even though you held over a year, right? If you sell a put and hold it over a year and you let it expire in the money and are thus put 100 shares, how is the premium that you received taxed? In the above example, you now have to hold the stock for over a year for that to be considered long term also, right?
Profits from short sales of stocks and stock options are short term capital gains. Profits from short sales of Section 1256 contracts are 60/40.