Covered Calls-Writing Covered Calls

fakechat6 asked:


to fufill the contract if the buyer of the put exercised the put in the money? In other words would I just hand over the stock to fufill the bargain. Or do I have to use cash to secure the deal when selling a put?

Rachel

Arman asked:


I have an offer from a startup that does not yet have a formal stock option plan. The CEO’s excuse is that “drafting a formal plan is expensive” and he wants to wait until the company has income before getting the plan drafted. He insists that the legal fees can be upwards of $20k or more.

So, how much does it really cost to adapt a stock-option plan?

I have heard that it’s really an off-the-shelf document and doesn’t cost much.

Emelda Blumstein

sc00bie doo asked:


My company was acquired in 2006 and the acquisition closed at the end of the year. All of our vested stock options were paid out in our paycheck, and taxes were withheld from them. In addition, we were also paid out for our last ESPP purchase in the same pay period and taxes were also withheld for this. All of these sales are already included in my W2 form and included as income. My question is: Since taxes were withheld for the last ESPP and all of my vested stock options already, do I still have to report them in Schedule D as Capital Gain?

I am using TurboTax Premiere, and if I report these sales it automatically adds disqualifying disposition as income to my W-2, which is incorrect and redundent.
Thank you for all of your responses! My stock options were mostly ISO, but some were Non-Qualified. The exercise and sale date is the same. My company paid us for all of our vested stock options. They reported the difference between [ (Deal Price - Option Price) x Number of Vested Shares ] as income in my W2 and this income has already been taxed. For example,

Number of Vested Shares: 1000
Option Price: $30
Deal Price: $40

Cash Payment = [ ($40 - $30) x 1000 ] = $10,000

The $10,000 was paid out in a paycheck and tax was deducted. I did not receive a 1099-B for the sales. In fact, I called my broker and they said because the transaction was performed by the company, they will not be reported in 1099-B. As for the non-vested stock options, they were converted to company stock of the acquiring firm so I am not as concerned about them because I still hold them.
My last ESPP purchase was treated the same way. The difference between [ (Sale Price - Purchase Price) x Number of Shares Purchased ] was reported as income on my W2 and has been taxed already. This purchase & sale was also not reported on 1099-B.

So my main concerns are:

1. Do I have to report these sales? They have been taxed already and I don’t want to be taxed twice.

2. There is a possibility that too much tax has been deducted from these sales in my paycheck. If so, how do I figure out how much should be taxed? I believe the only way is to enter these sales thru Turbo Tax Premiere.

Brendon Eichelmann

devildawg333 asked:


If I want to sell stock option contracts to a friend, is it possible to set up? Also, are the costs of unexercised option contracts tax deductible?

Wilbert Cofresi

Bman asked:


I thought it would be based on the avg daily volume of the stock – The higher the stocks volume, the higher the options volume. But I have compared the option volumes of some different stocks with avg daily trades of app 4,000,000 trades and it seems like the options activity for one may be very low and the other very high.

Shana Samela

?ßû??? v? ßè???? asked:


I had a Microsoft option which expired in Jan because it has already lost 99.5% in value and there was no point selling it because if I did I wouldn’t get anything anyway because what’s left would just go straight to the commission and fees.

my question is, can I claim that option as an investment loss since I didn’t sell it or exercise it?

Laurine Steffey

likehown asked:


I bought a stock and call and put on it. I made a profit on the stock and took a loss on a call and put option. If I buy the stock and different put and call option strike prices within 30 days, is it considered a wash for my options losses for tax purposes?

Dominic Kertis

David R asked:


I have 400 stock options that were given to me as a bonus, but I don’t know how stock options work. Do I have to pay for these options at the price that was posted when I received them if I want to exercise them?

Trevor Prosser

Houyhnhnm asked:


Not necessarily the one that made the most money or the highest percentage return, but where everything worked out like you’d want it to?

My favorite was US Cellular in 1999. USM wasn’t a rocket, but it had been moving steadily higher before I bought it and continued higher at about the same rate. I was able to move my fairly tight stop every week or so. As it approached a double it started moving faster, which was a mixed blessing for me because more volatility raises the odds of getting stopped out. I had a double on paper but then the stock spiked down and stopped me out. It went on to double again very fast but I never got back in, and then it crashed a few months before the general crash began. I’ve had a few other doubles and near-doubles but never one so quickly and smoothly.

Johnny Amerine

STUDYAND FEEL PAIN asked:


I have no college degree so I believe this will be impossible. Someone please help. I can pick stocks going up and down better than most professional who work on wall street.

Arnulfo Wojciechowski