Options strategies with Swissquote

Investing / Others
1

Good day,
so I have a couple positions of which I have 100s of stocks. Some I got inherited, others I purchased myself. About one year ago I read somewhere on the internet about the covered calls and I have, over the last year, started selling covered calls on the positions I have.

I usually sell the calls and close them when I reach about 30% profit. I know about “Kreisschreiben 36” for the taxes and being assigned the “professional trader” status, but to make sure, I talked to my tax advisor and the tax office. They both said the same thing: cause I am still employed as normal employee and under no circumstances could live from my options trades, this is irrelevant. Also, I cite from the tax office “unless you are making 100s of thousands per year, we will not even look at this closer.”
So I think the options are “safe” in that sense that I will not even be considered a professional. (which I am not. I am doing this as hobby, to increase a bit my cash, and because it is interesting. I am actually an electronics engineer and never plan to live from trading.)

Now that I have given the disclaimer :slight_smile: I want to ask something. So are here some people who also use these call options, and how do you do it? I am not sure if I am doing it “the right way” because I try to be super careful and conservative. For instance I usually look at the 0.2 Delta, 20 to 40 days to expire. Of course this does not give a huge premium, but as soon as I close one trade, I open the next. With this approach I can make around 100 Fr per week, sometimes a bit less, and I still keep all my shares. If I get close to assignment, which happens rarely, I close the trades earlier.
The premium I get I collect and then reinvest in the stocks, such that I have more stocks, this will not only give more dividends, but also opens the opportunity of selling more calls.

Also, the options premium are taxed like capital gains, and not like dividends. So it should be not too much of a problem.

I wonder now. I have read about these option strategies, like buying a call option, and then selling one with a higher premium. The call option bough is used for protection in case one gets assigned. For instance, for VOO one would need more than 50k USD cash to sell one put or call, but with this strategy, you need less.

I use Swissquote broker. I know it is a bit more expensive, but I previously was at the Kantonalbank, which is really the top of the most expensive ones, so I am currently quite happy with it. I wonder if someone else is using these option strategies with Swissquote. You cannot directly trade them like with IB, but they say the system accepts option strategies but you have to place all orders manually, which should not be too much of a problem I think.

Anyone has experience with this on SQ? does it work? how “dangerous” is it? I have not tens of thousands of cash available, as I don’t touch my emergency savings, and all else I do invest, but it would be very attractive to squeeze even a bit more out of these options than I currently am, this would offer whole new possibilities.

What do you guys here think?

2

Looks like this post was overseen. I am pretty certain there are people here who sell covered options. Would be interested in learning more about it.

3

Not Swissquote. I use IBKR and trade a lot of options there (almost 90 in 2024). Average fee per contract is $1.05.

I do not sell call options on the stocks I want to hold like VWRD or CHSPI. First because I want to keep them and secondly because there is no options market on European/Swiss ETFs.

I have a dedicated portfolio (around $55-60k) where I sell secured put options to generate a cash flow. Only when I get assigned, I start selling covered calls to get rid of the stock. Only to start over this so called ‘wheel’.

Honestly, I don’t like the covered call phase of this strategy. First you’re stuck with the stock you own. So if the stock drops, the options becomes worthless, but you cannot sell a new call on a different underlying (with puts you can choose a new stock every time you sell.). Secondly, and this happened many times, you sell a covered call for maybe $200 for 2-3 weeks. Then the stock rises sharply and you miss out on thousands of capital gain (AMD/NVDA in June/July 2025). So instead of selling covered calls, I sometimes just keep the stock and wait for it to recover (or beyond), in which case there is no cash flow from this strategy (AMD/NVDA between 11/24-05/25).

For more details see My Option Odyssey: Personal Experiences, Numbers, and the Path Forward after Year One

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4

I think I’ve done it once or twice to get rid of a position I wanted gone anyhow.

I wouldn’t do it at SQ:

  • their fees were outrageous last I checked (selling one put cost me 5 CHF in fees)
  • when the option exercises, you will pay buy / sell prices as if you bought / sold the position (which are again outrageous transaction fees).   To add injury to insult: if you’ve bought any fixed price trades they won’t apply to those transactions associated with option exercise at SQ.
    At IBKR an option exercise won’t trigger any fees … it shouldn’t as the position transfer normally associated with an option exercise is a SWIFT message transferring the lot between the counterparties.
5

Given the title says Swissquote, and PostFinance uses Swissquote as a broker, does someone know if it’s possible to trade options on PF? If there is I haven’t found it.

6

I have tried it quickly but gave up after 10min. As mentioned before there is no point in doing that on a Swiss broker. I also use IBKR for swissshares and once assigned I transfer the shares for free to PF from IBKR. Works perfectly if you want to keep the shares if you want to go on with covered calls if course this does not work anymore.

I do also not like the call phase of the strategy as I usually get assigned stocks that I want to own (most recently OGN) and not sell again.

In any case, buying is always easier than selling :winking_face_with_tongue:

7

Do you mean you couldn’t do it? I never managed to find an interface for options on PF. I have an IBKR account but would need to fund it before doing any options, whereas I’d be keen to do the wheel on SCHD which I already hold on PF. Oh well, Let’s say I’d put USD3000 on IBKR to sell one CSP, frankly it feels like nothing serious with these numbers.

8

Fully agree I would not use the IBKR for options only. What I do is having the PF account for all my Swiss and UK shares (for uk shares I have the dividend reinvestment plan active) and buy with the dollar dividends from VWRL new EIMI shares to use the trade credits of 18chf per quarter.
On IBKR I have my US and RoW shares and buy all shares including Swiss and UK shares ideally via CSP. I need to be careful though to not get greedy as I started to buy also VT via CSP which did not get assigned for some time now. I feel that the market should pay me to buy stocks and not me paying to buy. But yeah this is pure market timing which will never work in the long run.

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9

<still slightly offtopic as not Swissquote related>

The $1.05 is your average, I presume?

This is possibly documented somewhere on IBKR, and I am not familiar with it, but from hear-say I believe option fees can vary a fair bit even with low cost brokers like IBKR.

My most recent trades had fees ranging from five cents to a a dollar and six cents.

Bought an SJM Oct17’25 80 Put today for $25 and fees of $0.05.
Bought a UNH Dec19’25 160 Put last Friday for $134 and fees of $1.06.[HT]
Sold a LMT Dec19’25 380 Put last Tuesday for $800 and fees of $0.06.

HT (Hat Tip) to @larix.aurea, of course.
10

The minimum commission is $0.25 per contract, but…

If using limit orders, you sometimes get money from the exchange for “adding liquidity”. This can result even in negative commissions, you get paid to trade.

IB is one of the little brokers (the only one I know) that forwards those negative fees to the customers, but of course only if you choose tiered pricing.

Check “third party fees” here: Commissions Options | Interactive Brokers LLC

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11

Hi guys

thanks for the interesting replies. I know the SQ fees are a bit high in comparison to others. But I have to say, I was previously with Kantonalbank, and there I had even fees of more than 20.- for each trade, so SQ feels already like a big improvement. I know IBKR would be better but I am a bit hesitant as I then would need to do the tax declarations myself, and also I am a bit afraid of the transfer costs - migrating from Kantonalbank to SQ cost me already 50.- per position in my portfolio, as there are now quite a number of positions, I think the transfer costs would be ridiculous. But I see the point. Probably it was a bit of a mistake to go to SQ in the first place, but IBKR just looked too difficult to me for the beginning.

Something else: I see here that some people are trading quite a bit of options. Very nice. I just started this year in ~january for the first time, and to keep my risk a bit under control, I wanted to do this with a stock that is not too expensive. I chose MARATHON DIGITAL to do some exercising with the puts and calls, bought 100x MARA stock and started to sell calls. I have to say, even though I am a beginner, I think I did not too bad because, in the meantime, I earned enough premiums from the covered calls that the stock paid for itself and I let the last call get assigned.
To see if I am “successful” or not, I made a little log book where I note my trades.

What I am curious, you guys who trade often (I see above about 90 trades per year), has the tax office ever considered you being a professional cause you trade often?

Also for those for selling calls: what strike prices and days to expire do you choose? I always went with ~30 DTE and 0.3 DELTA, and it worked, but the premiums are sometimes a bit low.

Do you use optionstrat to determine good strikes and DTE?

What I found is also sometimes working great is buying a call and selling another call on the same stock, i.e. credit spread. For example, I did it a couple times with GOOGL stock, for example buy the 180P / sell the 185P. It worked out well a couple times, but I stopped doing it as I was afraid of the tax office.

12

I do maybe a couple dozen option trades per year (about 200 since May 2020) , depending on volatility, so maybe not your best source of information.

The first question I’ll ask is why the tax office would ever know about your option trades.   It’s not that you have to hide them, but you have to declare year end positions only.
See my post on how your tax commissioner in practice judges whether you are a professional trader: 6 month holding rule clarification - #5 by Your_Full_Name (the link summary is a little misleading: I don’t just discuss the 6 months holding rule, but the aggreate of your trades that might look like executed by a professional trader).

13

Either you make much money with it or not. If not, why bother? If yes the taxman wants to know where the higher assets came from.

If you plan on hiding you should probably use an account only for this kind of trade. I was asked last year for a detailed statement of all transactions at my broker by the taxman because my taxable estate went up way more than my taxable income could explain. No problem, I use mechanical strategies where all the rules adhere to Kreisschreiben 36, so I just provided the statement and they were satisfied.

Should have spent (even) more… :rofl:

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14

Badge of honor from the taxman … :wink:

If you do, you probably should be treated as professional investor, but that’s just my opinion, and probably not in the scope of your original question.

15

Yes, sorry for not pointing that out clearly enough.

Never seen such a low fee before. $0.43 was my cheapest contract so far. Interesting…

No. And I give them the complete yearly report from IB listing all trades.

As I said I aim for a 1% return for two weeks, i.e mostly Monday til next week’s Friday.

16

I treat close to 15 contracts per week in average, never had any question from the tax man. There are sufficient topics on this subject on the forum: the pro trader status will only be triggered by an increase in taxable wealth that cannot be explained by your work income / variations of the market, e.g. you suddenly increase your wealth by 100k while unemployed and the market went down 20% year on year and you had a 1 million stock portfolio at end of last year.

You don’t need to send details of your trades to the tax office, you only need to declare dividends, interests and year end value of your portfolio so unless they ask you to provide a complete portfolio statement any trading activity does not need to be disclosed.

On their side being considered a pro trader could also result in tax income losses as you can start deducting trading losses, there was a case in AG where a guy asked to be considered pro so he could deduct several 1000s in trading losses from his taxes and this was refused ^^.

17

sure the tax man will know about the options trades. Because trading options is one of the rules that are in the Kresschreiben 36. Furthermore, as I use Swissquote, I can automatically generate at the end of the year an account statement that includes all my trades and stuff, for the taxes. With the tax software (Easytax in canton AG) you can import these account statements and then it automatically fills out the tax form, super convenient and no mistakes. BUT every trade will be listed. So for sure they will know that I traded some options. But the gains are small, I could not live from it.

Another thing is, if you trade for example the “wheel strategy” where you sell puts until assigned and then sell calls until assigned / rinse and repeat, it will not be guaranteed that you will hold every stock for more than 6 months, so again, this rule will be violated. But also here I am not sure how severe this is.

interesting. Could you give some insights on which stocks you do this? I found that the premiums are often quite small for swiss stocks and and for low DTE. For example I have 200 each of NESN, ABBN and SDZ. SDZ does not even have weeklies. So is not so interesting. ABBN does have weeklies, but I want to keep them. And NESN… premiums are low so you maybe get 30CHF per contract over 3 weeks, so 10 CHF per week, I am not sure if this is worth the hassle. But probably I am doing it wrong. But with GOOGL and MARA I had more success than with my swiss stocks. Don’t know why. But there also the premiums are a bit more interesting.

18

I usually treat US stocks with some high IV like AMD, NVDA etc., because indeed premiums are low on weekly expiries, otherwise you need to trade on longer maturities. I mainly do credit spreads, i.e. sell and buy a put / call with the same maturity but different strikes to lower the exposure. I only do this on stocks I’m happy to hold as I can be assigned any time.

The strategy of selling puts / calls has indeed a limited gain by definition since you can only earn up to the premium you are paid. If it’s worth doing is up to one’s decision ^^.

19

We might be talking past each other.   My point is that you do not have to provide your trade history (options or not) when filing your taxes, at least not in Zurich (unless the taxman later asks for the list of all your trades).[§]

I have never provided my trade history for the tax year and even in the year I was audited the taxman did not ask for a trade history.

§   It’s useful to enter position size changes for non-option securities in the tax form as the software/web-form will automatically calculate the right amount of dividends paid, but you can trade 10k options per year and aim for not having any on your year-end position statement (which I submit) and the taxman will never know about your option trading (unless they ask for it …).
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20

I got asked for a detailed trade history over 2023 in Zurich.

Starting year @ 224k, deposit 60k, and 50k in market gain & dividend – ending year at 340k. Relatively few trades, and no options.

Curious what will happen for 2024 where I did not make any deposits, but gained ~60k with even less trades.

(Also wondering whether I should become a bi more active or not – some underperforming positions I should maybe kick out).