without any further obligation? what capital gains taxes are involved?
2007-11-05 21:32:27 · 4 answers · asked by noavatar 1 in Business & Finance ➔ Personal Finance
Yes (you can sell your $1 for $7, keep the profit without further obligation and pay capital gains taxes, usually short term capital gains at ordinary income tax rates), but...
Options are a way to leverage your investment. As a leverage tool, it also increases your risk. Options have a time value built into them as they expire (have a limited time). The further out the option, generally the more time value it has (money you are paying for time). In order for a $1 microsoft (or any company) call option to be worth anything, the underlying stock has to go up AT LEAST $1. In most cases, quite a bit more than $1.
If the stock price of the stock the call is on hasn't increased in the time period, then the option expires as worthless. So, if you bought $100 of microsoft stock and the price didn't change over the time period of the option, then you still have $100 of microsoft stock. If you $100 of call options and the price doesn't increase over time, you lose your $100.
good luck!
2007-11-06 03:13:05 · answer #1 · answered by Rush is a band 7 · 0⤊ 0⤋
by utilising doing what you describe, you're in fact "doubling up" your guess that the inventory fee will circulate up. What happens if it is going down - no count number if with the final industry or a "black swan" journey? you will possibly lose two times - one as your places upward thrust, and yet another as your calls decline. think of this over heavily till now you are attempting this. you may desire to lose a extensive quantity of your money.
2016-10-03 11:20:39 · answer #2 · answered by rajkumar 4 · 0⤊ 0⤋
Yes you can, of course if you are staying and resident of US than you are are still obligated to pay tax.
2007-11-05 23:45:15 · answer #3 · answered by Anonymous · 0⤊ 0⤋
what country are u in?
2007-11-05 22:18:35 · answer #4 · answered by ZahirJ 2 · 0⤊ 0⤋