Hi Mustachians,
assume one owns an ETF or a stock that also has an active option market. Here assume I own say 100 SPY stocks, this ETF has monthly/weekly options:
Yahooist Teil der Yahoo Markenfamilie
If I sell one out-of-money call contract a month out hoping that SPY won’t reach the strike price and I just collect the premium, will the tax authorities consider this premium as income? Will I be considered a trader from a tax status?
-zmo
It does not imply anything per se. The only published set of criterias there is determines when you are definitely not a professional trader. But yeah, with your behaviour you are definitely risking getting it.
You can write to your tax office, describe what you want to do and ask for a binding tax ruling - this is the only way to know for certainty.
Hello,
What if you open 2 different brokers accounts:
Any chance they would tax us only on that second account and not on the main one?
No. Professional trader is per person, not per account
Ok, thanks for your answer. It would have been too easy!
Can someone please explain a little bit rule number 2?
I am struggling to understand it:
If at the beginning of the year I have a investment portfolio of 1000, then I buy some shares for 5000 and later (after 6 months) I sell them for 6000 finishing the year with the same amount in my portfolio (1000). Wouldn’t my transaction volume (11k) be five times the total value of my securities at the start of the tax year?
Wouldn’t it be difficult to comply with this rule during a market sell-off when people are trying to cut their exposure by reducing the amount of their investment portfolio?
Technically yes.
Technically yes.
Practically, it’s meaningless.
Also, it’s not a rule but rather a possible criterion.
french version says " du montant des titres et des avoirs". I understand “avoirs” as including money.
Is this the reason why I didn’t find any post with people being scared by this criterion? I think it is quite constraining, especially in the FI community where with a high save rate it is possible to transact more than 5 times the value of the portfolio at the beginning of the tax year.
Should I be worried if that is the case?
Ok I think this might be it, I check the Italian version and it says “il valore dei titoli e degli averi sui conti”.
Including also all the bank accounts makes more sense.
Same thing in the German version (“Wertschriften- und Guthabenebstand”). This is omitted in Thaek’s post above. So wouldn’t violate the federal tax administration’s guidance’s criterion.
It is important to note - just as Thaek above say - that the criteria are meant to definitely rule out professional trading activity. In no way do they mean that a “violation” will automatically lead you to being classified as a professional trader.
The possible classification intends to capture trading activity deliberately intending to achieve short-term capital gains. It is not meant to “punish” personal investors for one-off (or even regular) portfolio reallocation.
Do we have a definite answer on the leveraged ETF question?
I want to implement a strategy that includes holding a daily 3x bull etf with 10% of my assets.
That very statement reads like coming from a professional trader.
Does it (implementing that strategy) guarantee you’ll be considered one? Probably not.
I think its human nature to speculate 
. Not a professional trader haha.
Equipped with youtube, robinhood, and r/wsb everyone can become a professional trader in under an hour. 
If you are holding it and the tax office decides that you are a professional trader, what would they tax you on? In my opinion you don’t make any taxable profit as long as you don’t sell it but I might be wrong.
Holding a leveraged, daily rebalancing ETF long-term is a losing propostion.
Backtests say otherwise. It’s veeery volatile, but will probably be worth it longterm.
Well I won’t be the one to say if it’s a smart investment or not but they said holding 
On the other hand if the intent is to daily trade this ETF then I’m pretty sure the tax authority will have something to say about it.
The ones on and conveniently starting with the unprecedented tech-fueled US bull market of lately, you mean?
Going to a more “normal” performing market, we can compare
The unleveraged ETF beat the 2x leveraged 120% to 70% since inception 14 years ago.
PS: Granted, that was shortly before a bear market, and if we’d start out three years later, the picture would reverse, with the LevDAX product beating the unleveraged 280% to 160%.
PPS: Or doing this for Emerging Markets ETF (from ETF inception, I’m lazy to backtest):
(That’s me having chosen “conveniently” the end date, for purposes of illustration, since the leveraged fund has overtaken the unleveraged fund by 15 percentage points over the last 5 or 6 weeks)
So why is everyone here so religious about VT?
At least did you put your money where your mouth is, with that overperformance of daily leverage? 
