Earlier this month, I sold shares of SDS to take a tax loss and shorted shares of SSO to maintain the position’s exposure. Today, I made a similar two part transaction, which gives me a desired tax loss for 2010 while maintaining downward market exposure. I bought to cover my SDS put spread (initiated in August) and replaced this position by selling an SSO call spread.
The trades: Bought To Cover 4 contracts of 36/28 SDS Jan11 Put @ $7.75 for a total of -$3,115.06. Sold To Open 4 contracts of 50/43 SSO Mar11 Call @ 4.00 for a total of $1,504.93. Ideally, this replacement position would have been larger, but I didn’t have enough funds in the account. Hopefully I can add to this short position in the near future.
For those of you new to harvesting capital tax losses, please read the example in the post directly below.
Both of these trades impact my Top Five, which has been updated accordingly.
