Options Trading Tutorial

What are the tax implications of options trading?

If I use an option straddle strategy, and I bring in $100K over the course of the year but I lose $90K on the other side of the straddle, do I pay taxes on the $100K, or only on the $10K that I actually came away with? If I have to pay tax on the $100K, am I only allowed to deduct the max allowed loss of $3K? Thanks!

Public Comments

1. If these are the realized gain and losses (you actually sold and bought) that you've, you 10k will be your net gain. You got to remember to include the option that expired as part of the losses. Just in case, you've got net losses at the of the year. You can only deduct up to $3,000 on your individual tax return per year.