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Old 08.12.2018, 20:50
bill_door bill_door is offline
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Re: Short term capital gains taxes in switzerland

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Is selling covered calls considered hedging for real? I thought the idea behind selling covered calls was gereating income

from a general consensus and buy-and-hold perspective, yeah you're right but i didn't want to confuse the issue too much. personally i don't look at it like income, i prefer to strictly look at as cost-basis-reduction on the stock purchase. in a best case scenario, sometimes you end up with a stock position essentially for no cost. a subtle difference, but a significant mental change when approaching a trade. And I would argue it that way if challenged by the tax man.

buying options is usually defined as hedging but it depends on the underlyings total position and on your overall portfolio. you could in fact be hedging your entire portfolio not just the individual stock (where is that in the 5 'rules' ! (c; woolly, woolly. ) and in any case nearly all positions can be are synthesised in something else e.g. long stock can be synthesised by a short put but with significantly lower buying power requirements i.e. much more capital efficient. but that's a tangent to the topic (c;
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