First I'd like to say how helpful Elitetrader has been,I've learned alot from reading everybody's threads, and how great it is to have senior members to give advise. I've seriously been considering trading for a career and I just had a couple of questions, I hope somebody could answer. First, if you trade at home and techinically don't have a job how would one go about getting insurance. Second, lets say stocks are going great and the money is coming in and you want to buy a car or a house, will banks give you a loan with out being employed. And finally, I understand how taxes work, but lets say you bring 200,000 in a year, how much would our wonderful goverment take and how complicated is to file. Any answers would be well appreciated. THANKS
Welcome to the forum! I'll try to answer some of your questions, and I'm sure some of the other members can help as well. First, regarding insurance, I assume you're talking about health insurance? If so, and you are a full time trader without any other job, you would have to find an independent health insurance provider and pay a monthly insurance premium just as you do with your car or home. Regarding getting loans, etc., you do have a job if you're making money as a trader. In this case you would be self employed, and while it may pose a few extra hoops to jump through with lenders, if your tax returns show you're making money as a trader (or any other profession for that matter), you can qualify. Finally, regarding taxes, if you file for trader status with the IRS, you can deduct all your trading expenses, as well as avoid the wash sale rule, which will greatly help your tax situation.
Zboy has a lot of good points and covered it pretty well. I trade for a living. My insurance for car is Progressive and my health insurance is Blue Cross. My life insurance is at American Express Financial Advisors. Open the phone book and let your fingers do the walking. Look under insurance for whatever you want. There is someone who will gladly and easily sell it to you. Second, lets say stocks are going great and the money is coming in and you want to buy a car or a house, will banks give you a loan with out being employed. I've bought a condo while being a trader. Tax returns say a lot. So do brokerage statements with a lot of equity. And finally, I understand how taxes work, but lets say you bring 200,000 in a year, how much would our wonderful goverment take and how complicated is to file. Now this can get very technical here. Taxtrader.com and tradertax.com should answer a few questions here. First you can file as an individual with a 1040A. YOu can also have your trading done in a limited partnership or a C Corp. You can also have the C Corp do your health insurance so it is spent with before tax dollars. This is getting really far ahead though. First learn to trade successfully as that in itself has a learning curve. Robert Tharp
For health insurance, check out http://www.ehealthinsurance.com I've read in a couple different places that traders who elect mark-to-market don't have to report all their trades individually--you can just figure P&L based on your starting and ending balances (with adjustments for deposits, withdrawals, etc.) from brokerage statements. So that makes trade reporting a lot easier.