| Short Options (sell/write) | If position is closed before the expiration | If the option is exercised (assigned to you) |
|---|---|---|
| Short Call | Regardless of holding period, the capital gain or loss is always considered short-term. |
• The capital gain or loss is treated as short- or long-term depending on your holding period for the stock. • The amount you received for writing the option is added to the amount received from the sale of the stock. |
| Short Put | Same as above. |
•Your holding period for the stock begins on the date you buy it. • If the put option is exercised and you buy the underlying stock, decrease the stock's cost basis by the amount received for writing the option.
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