|
|
Post by boca1girl on Oct 19, 2017 19:00:57 GMT -5
Usually, the more “time” you can afford the buy, the better. I bought MNKD 2016 leaps at 3, 5, 7 in 2014 after FDA approval and syn partnership. I thought that was plenty of time for Afrezza to prove itself in the market. All expired worthless at a big loss. Yesterday I bought the 2020 5’s at $1.80. I am more conservative (closer to in the $ and furthest out) now that I got burnt in 2016. Things are looking up and I have more confidence that MNKD will be successful, but unless you have a crystal ball, it’s hard to pin WHEN success will be apparent and the stock price will be much higher. Don’t forget that a decline in the overall stock market probably won’t help either if one occurs in 2018. "all is not lost Boca" ...staying with the tax theme, those that expired worthless at least you should have a decent capital loss carry forward to offset all the gains you hopefully will be making on your second go around, please check with your tax advisor as everyone's situation is different and there may be time constraints regarding stature of limitations on how long you can carry forward the loss to offset gains outside of the usual 3k max if you don't have any outsized gains to write them off against. Sorry for the run on sentence lol, maybe BD can tidy it up for me although I think he has given up on cleaning up my run on's and grammar at this point  I understand the tax consequence but it doesn’t apply if the options were in an IRA. |
|
|
|
Post by xanet on Oct 19, 2017 19:06:30 GMT -5
"all is not lost Boca" ...staying with the tax theme, those that expired worthless at least you should have a decent capital loss carry forward to offset all the gains you hopefully will be making on your second go around, please check with your tax advisor as everyone's situation is different and there may be time constraints regarding stature of limitations on how long you can carry forward the loss to offset gains outside of the usual 3k max if you don't have any outsized gains to write them off against. Sorry for the run on sentence lol, maybe BD can tidy it up for me although I think he has given up on cleaning up my run on's and grammar at this point I understand the tax consequence but it doesn’t apply if the options were in an IRA. Ha! My situation exactly! I'm trying to be more careful this time around, but I don't really know how else I would have played it, except maybe a straddle or just buying more of the stock directly instead of calls. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Oct 19, 2017 19:34:35 GMT -5
For whatever it is worth : with the price dropping precipitously, purchase your calls over time, you will end-up paying less.
Good luck!
|
|
|
|
Post by radgray68 on Oct 19, 2017 19:46:56 GMT -5
For whatever it is worth : with the price dropping precipitously, purchase your calls over time, you will end-up paying less. Good luck! the enormous volume and price movement has spiked the volatility factor of the options. I'm waiting for a solid bottom like DB, (wait, that sounds weird) |
|
|
|
Post by boca1girl on Oct 19, 2017 20:07:15 GMT -5
I’ll never buy calls in my Ira again. Had I used that $$ to buy shares, I would be way underwater today but still holding shares with the potential for a gain.
|
|
|
|
Post by straightly on Oct 19, 2017 20:29:00 GMT -5
I’m thinking BO June of 19:-) JK. But I’ve got so many 2019 calls I’m trying to spread the money out for tax purposes or if we get shares/options in another company I wouldn’t have to sell those until close to expiration. Curious if the tax considerations. So far, I am ignoring it: tax just mean I got to keep less of the money I made, if I made any. Since I don't, it matters not. But kidding aside: If I buy an option say $10 strick 1/19 for $1.00, when 1/19 comes along, the price is $88. I have two choices: pony up $1000 to execute the option and keep the 100 shares. Or sell the option at $88, for a profit of 88-10-1=77 ($770). What is the tax consequances? |
|
erik
Newbie
Posts: 2 
|
Post by erik on Oct 19, 2017 22:46:05 GMT -5
I’m thinking BO June of 19:-) JK. But I’ve got so many 2019 calls I’m trying to spread the money out for tax purposes or if we get shares/options in another company I wouldn’t have to sell those until close to expiration. Curious if the tax considerations. So far, I am ignoring it: tax just mean I got to keep less of the money I made, if I made any. Since I don't, it matters not. But kidding aside: If I buy an option say $10 strick 1/19 for $1.00, when 1/19 comes along, the price is $88. I have two choices: pony up $1000 to execute the option and keep the 100 shares. Or sell the option at $88, for a profit of 88-10-1=77 ($770). What is the tax consequances? I'm not an expert on tax nor a black scholes expert but I'd like to point out a couple things. First off as the option approached expiration with a strike of 10 and theoretical price of 88 dollars your option contract would be worth 78 dollars intrinsic value. That would be 7800 dollars not 780. Options pricing is much more convoluted than that. If a price run up of that magnitude were to occur the implied volatility would be off the charts, probably adding even more to the premium. As for taxes, options held longer than a year are taxed as long term capital gains. |
|
|
|
Post by straightly on Oct 20, 2017 1:07:20 GMT -5
Curious if the tax considerations. So far, I am ignoring it: tax just mean I got to keep less of the money I made, if I made any. Since I don't, it matters not. But kidding aside: If I buy an option say $10 strick 1/19 for $1.00, when 1/19 comes along, the price is $88. I have two choices: pony up $1000 to execute the option and keep the 100 shares. Or sell the option at $88, for a profit of 88-10-1=77 ($770). What is the tax consequances? I'm not an expert on tax nor a black scholes expert but I'd like to point out a couple things. First off as the option approached expiration with a strike of 10 and theoretical price of 88 dollars your option contract would be worth 78 dollars intrinsic value. That would be 7800 dollars not 780. Options pricing is much more convoluted than that. If a price run up of that magnitude were to occur the implied volatility would be off the charts, probably adding even more to the premium. As for taxes, options held longer than a year are taxed as long term capital gains. Oops. Missed 0. So if I sell my call, the prifits are taxed as capital gains. If I held it over a year, it would be long term capital gain. What if I exercise and buy the stocks? Do I have pay tax on the gain immediately? Or do I defer it till I sell the stocks? Will I add the price I paid for the option itself to my cost base? |
|
|
|
Post by babaoriley on Oct 20, 2017 1:58:35 GMT -5
My understanding - you would have a taxable event for the year in which you exercised your option (buy option for $1, exercise when stock is $10, you have $9 of capital gain, short or long term, depending on length you held option. Then, you'd have a $10 basis in the stock, and go from there.
|
|
|
|
Post by casualinvestor on Oct 20, 2017 9:18:14 GMT -5
I’m thinking BO June of 19:-) JK. But I’ve got so many 2019 calls I’m trying to spread the money out for tax purposes or if we get shares/options in another company I wouldn’t have to sell those until close to expiration. Curious if the tax considerations. So far, I am ignoring it: tax just mean I got to keep less of the money I made, if I made any. Since I don't, it matters not. But kidding aside: If I buy an option say $10 strick 1/19 for $1.00, when 1/19 comes along, the price is $88. I have two choices: pony up $1000 to execute the option and keep the 100 shares. Or sell the option at $88, for a profit of 88-10-1=77 ($770). What is the tax consequances? Depending on your tax bracket, you would pay 0%, 15% or 20% long term capital gains tax Short term capital gains (held for less than 1 year) are taxed at your normal tax rate. Most of my averaging down still falls under short term, so that helped me decide to not sell recently... |
|
|
|
Post by jred on Oct 20, 2017 9:20:06 GMT -5
I will try to confirm with an actual tax professional because tax implications of options can get very complicated especially when dealing with covered calls, wash sales, roll outs ....
But for a straight forward exercise of an in the money call, I do not believe their is a tax liability until the shares are sold. The clock is reset for holding period however. So even if the call were held for over a year after exercise the cost basis would be $11 ( $1 option cost + $10 strike ), but the tax character is reset to short term with holding period of 1 day. The stock would have to be held for over a year to get long term tax treatment.
|
|
|
|
Post by blakjak on Oct 20, 2017 10:15:26 GMT -5
I bought more shares today @3.85 for the first time in a really long time. I need to find my old post but I lost a shitload a few years ago on mnkd, but thankfully got out when I did at like $4/sh (split adjusted to $20 now). Me getting back in should be an indicator that we're going bankrupt tomorrow, and for that I apologize in advance to everyone. Sounds a lot like me |
|
|
|
Post by sportsrancho on Oct 20, 2017 10:19:37 GMT -5
Sure I’m glad I got those calls yesterday!
|
|
|
|
Post by charlespk on Oct 20, 2017 11:51:22 GMT -5
Well, I did something I had never done .I bought calls on the money
bought calls 01/2019 at a strike price of 3 , right at opening bell.
I paid 1.82 for them , so given current at 4.35 , not that far from being on the money and i have till 2019
thanks for everyone who responded
|
|
|
|
Post by joeypotsandpans on Oct 20, 2017 16:03:03 GMT -5
Well, I did something I had never done .I bought calls on the money bought calls 01/2019 at a strike price of 3 , right at opening bell. I paid 1.82 for them , so given current at 4.35 , not that far from being on the money and i have till 2019 thanks for everyone who responded Well they closed with last trade @ $2.00 so I would say you did great Charles and you're in company as those are the one's I rolled into from the Feb '18 1 strikes that I owned Now you've got some time to see how things play out and at some point in the future have the option to hopefully cash out with a decent gain while rolling out the same leverage into the 2020 strikes at a lower time premium. Should they get a nice BO or BI offer or some other nice binary event you're in great shape. Have a great weekend! |
|
