what are you selling today?

[dwy000]

3 hours ago, Spekulatius said:

Sold some more ABEV and the remainder of my GD.

(I am keeping my defense exposure in LHX, NOC and LMT)

Sold off my few shares in OGN (MRK spinoff)

 

Spek that's at least 3 "what are you selling" posts in the past week.  Are you sitting on cash or selling to buy something more appealing?

[LearningMachine]

30 minutes ago, Castanza said:

You could also short treasuries and  hold 3x Ultra Short Leverage 20 year t-bill ETF. I believe Burry took a position like this (they wrote a book about him ). But the SEC also made him shut his mouth a month ago and he had to delete his twitter

Thanks @Castanza.  What do folks think about partnering with IRS to make such speculative bets, e.g. use short-term capital gains to fund put options expiring within the tax-year, reducing the effective cost of Put options compared to other folks?  If it pans out, great.  If it doesn't, you save on taxes - of course you still lose the money but you would have paid a big percentage of that money to IRS anyway.  Anything I'm missing? 

Edited June 4, 2021 by LearningMachine

[aws]

If you're thinking of a strategy like that then you definitely do not want to have the options expire in the same tax year as your gain. If they hit then the profit is taxed in the same year as well, so you didn't really accomplish anything.

If you buy January 2022 options on the other hand, then you have the option of selling them on 12/31/21 and taking the loss this year if they will expire worthless, or holding them until next year if they are in the money.

[LearningMachine]

5 hours ago, aws said:

If you're thinking of a strategy like that then you definitely do not want to have the options expire in the same tax year as your gain. If they hit then the profit is taxed in the same year as well, so you didn't really accomplish anything.

If you buy January 2022 options on the other hand, then you have the option of selling them on 12/31/21 and taking the loss this year if they will expire worthless, or holding them until next year if they are in the money.

Thanks @aws, that's exactly what I ended up doing once.  I ended up selling the options in the same tax year to balance the short-term gain.  Waiting to sell the options next year was gonna make me pay the tax on short-term gain the year I bought the options.  However, you're right that buying options with expiration in next year gives me the option to decide. If there is a big gain in options, I could then take the gain next year, while paying the taxes on the original short-term gains this year. You could potentially extend the strategy to move the big gain in options to being a long-term gain, but with speculative gains, might not be able to predict well. 

Another reason I was thinking the trade might still make sense is that I'd be effectively trading (1) one short-term gain in 2021 from selling a stock for (2) another potential short-term gain in 2021 from a speculative option-based position.  Because #2 is speculative & volatile, #2 will likely result in either zero or multiple times of short-term gains from #1. If it is zero, I save on taxes (which is a benefit that other investors in that speculative option might not get).  If it is multiple of #1, I end up paying an even bigger tax bill, but still end up making a multiple of #1. 

Overall, looks like we agree that if one uses short-term capital gains to fund speculative options that they either sell within the same year or let expire within the same year, their effective cost is less than those who are not using short-term capital gains to fund them. 

Edited June 5, 2021 by LearningMachine

[Spekulatius]

2 hours ago, dwy000 said:

Spek that's at least 3 "what are you selling" posts in the past week.  Are you sitting on cash or selling to buy something more appealing?

Yes, I am slowly raising cash when fair  value is approached and I am not finding much to buy. I have been adding a tiny bit of VRTX and MRK.

I see it more reflective of the jack if opportunities than a big macro call.

[Spekulatius]

Sold my MITK in my tax deferred account. I am not too fond of the convertible debt issue a while ago.

[CharlesMunger]

Trimmed some Tenneco at $22 today. Anyone still holding?

[cubsfan]

^ Mine is gone, hoping to get another shot at it.

[Libs]

Half of my remaining XPEL. 

[gfp]

40 minutes ago, Libs said:

Half of my remaining XPEL. 

 

Every time I have sold some DAP.u, XPEL or even Generac, its ends up being a mistake so I stopped doing it.  But those early sales still sting...  Anyway - I hope you ended up with a lot more XPEL than I did!

[Libs]

2 hours ago, gfp said:

 

Every time I have sold some DAP.u, XPEL or even Generac, its ends up being a mistake so I stopped doing it.  But those early sales still sting...  Anyway - I hope you ended up with a lot more XPEL than I did!

Hey GFP. I know, me too. The funny thing is, I sold XPEL at 1/3 its current price in my IRA; but I kept all the shares in my taxable account because I didn't want the tax bill. (Sold half of those today). Had the whole position been in my IRA, I would have been totally out at much lower prices. Ironic.