Sorry, should have been more specific. I was thinking of doing
some spy put option position here. . I am thinking it
is possibly time for the market to turn down here for awhile
as you are saying also. So looking to go deep in the money a
couple months out maybe.
yeah deep in the money are safer and give a lot of room, but
obviously with the higher delta won't move as much as options
that are not deep and with a lower delta. But you already get
leverage with options anyway so for me I like the deep in the money
options as they more more in lock step with the SPY
movement.
now if you can afford them SPX options are better than SPY
options for tax reasons as you get the same 60/40 tax benefit as
you do with futures i.e. 60% of your gains are taxed as long term
capital gains vs SPY options which are taxed 100% short term
capital gains. The big money guys all do SPX options because of the
tax benefits which can be substantial savings in tax
SPY vs SPX options the tax benefits. I did the math once,
it's a moving curve and depends on the amount you profited, but as
an example:
If one traded SPY options and made 30%, they could have traded
SPX options and made 40% on the trade and paid the same amount of
taxes as making 30% on SPY. So a difference of 10% there is
big, which is actually 10/40 = pay 25% less tax on futures /
options over equities
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Sorry, should have been more
Posted by dakotadj on 5th of Feb 2019 at 11:51 am
Sorry, should have been more specific. I was thinking of doing some spy put option position here. . I am thinking it is possibly time for the market to turn down here for awhile as you are saying also. So looking to go deep in the money a couple months out maybe.
yeah deep in the money
Posted by matt on 5th of Feb 2019 at 12:36 pm
yeah deep in the money are safer and give a lot of room, but obviously with the higher delta won't move as much as options that are not deep and with a lower delta. But you already get leverage with options anyway so for me I like the deep in the money options as they more more in lock step with the SPY movement.
now if you can afford them SPX options are better than SPY options for tax reasons as you get the same 60/40 tax benefit as you do with futures i.e. 60% of your gains are taxed as long term capital gains vs SPY options which are taxed 100% short term capital gains. The big money guys all do SPX options because of the tax benefits which can be substantial savings in tax
SPY vs SPX options the
Posted by matt on 5th of Feb 2019 at 12:41 pm
SPY vs SPX options the tax benefits. I did the math once, it's a moving curve and depends on the amount you profited, but as an example:
If one traded SPY options and made 30%, they could have traded SPX options and made 40% on the trade and paid the same amount of taxes as making 30% on SPY. So a difference of 10% there is big, which is actually 10/40 = pay 25% less tax on futures / options over equities