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Best account for trading options, from a tax point of view?

Posted: Tue Jan 14, 2020 1:00 pm
by ochotona
Roth, Traditional IRA, or Taxable Brokerage?

Re: Best account for trading options, from a tax point of view?

Posted: Tue Jan 14, 2020 1:35 pm
by pugchief
Anything but the taxable account is better.

If you know they are going to be winning trades rather than losing, use the Roth. But if you know they are going to be losing, then don't make the trade. :o

Re: Best account for trading options, from a tax point of view?

Posted: Tue Jan 14, 2020 1:39 pm
by ochotona
pugchief wrote:
Tue Jan 14, 2020 1:35 pm
Anything but the taxable account is better.

If you know they are going to be winning trades rather than losing, use the Roth. But if you know they are going to be losing, then don't make the trade. :o
Me, losing

Re: Best account for trading options, from a tax point of view?

Posted: Wed Jan 15, 2020 10:48 pm
by Kbg
"Trading", taxable, always.

Go with me on this one, you will be glad you did.

If it is "Me, losing" it isn't even debatable which account is best.

If it is "Me, winning" move booked profits over to tax advantaged and "invest" them.

If I could do one thing over in my entire investing/trading life...the above would be it.

Re: Best account for trading options, from a tax point of view?

Posted: Thu Jan 16, 2020 4:07 am
by mathjak107
it depends on a few things ...

as an example if you make any kind of decent gains and are within 2 years of medicare the extra income can hurt you as far as what you get charged for medicare . .

if you intend to do roth conversions the extra income can take up space .

if you want or need an aca subsidy from 62-65 the extra income will hurt you .

taxes always reduce gains too so if you wrack up large gains like i do the trading is best done in a retirement account ...

over the long term taxes even at a lower rate wipe out any tax savings by the lower capital gains rates so odds are at any point in time if you are an active trader a taxable account will not work out well OVER THE LONG TERM because of those gain distributions .


https://www.kitces.com/blog/asset-locat ... e-horizon/

Re: Best account for trading options, from a tax point of view?

Posted: Thu Jan 16, 2020 8:42 am
by Cortopassi
I wish I never ever heard the word options as related to stocks. A couple major wins early in my investing career set me up for complete and utter failure with them for the 20 years that followed. Any strategy I tried failed. Long calls, selling puts, covered calls, spreads, Leaps, etc.

I wouldn't say it was an addiction, more stupidity than anything.

Given my emotional maturity in life now, I'd bet I would probably be more successful with them, but I have sworn them off for good regardless.