Professional investor/trader status

[FIREstarter]

@jay

To elaborate a bit, if you fulfill all of the 5 criteria of the “Vorprüfung”, you’re guaranteed not to be classified as professional trader. However, violating one of these 5 criteria does not necessarily imply that you are classified as professional trader, even when the authorities strictly follow Kreisschreiben Nr. 36.

I agree. Thanks for elaborating more on the 5 criteria. Indeed, I should also have mentioned your points as well.

@jay

The 3 criteria (somewhat vaguely) described later on decide the classification: trading volume, use of leverage, and trading derivatives beyond pure hedging. The use of leverage is the most important criterion.

I met someone 2y ago during a meetup (not from this forum, but another one) who lived in canton Schwyz and just sold put options. He didn’t use leverage at all, but of course it was not hedging in his case (how can selling put options and earning the premium be counted as hedging anyway?), and yet still he was classified as a professional trader and had to pay capital gains plus AHV on his trading profits. I don’t know about his trading volume though. Unfortunately, I don’t have his contact details, but maybe I’ll meet him during the next month.