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Tax Advantaged Options Summary

John J. Kiely, P.C.
Attorney at Law
John specializes in doing taxes for option traders.

Cash Settled, Broad based Index Options receive favorable tax treatment from the IRS.
60% of the gain, regardless of how long it was held, is taxed at the long term capital gain tax rate.
40% is treated as short term gain and added to your ordinary income.

Marty Kearney Seminar Summary (Courtesy Bill Ghauri on 27 Oct 2006)

CBOE Listing of Broad Based Cash-Settled Index Options

SEC Definition of "broad Based Index"

IRS Resource Publication 550(2005), Investment Income and Expenses:
http://www.irs.gov/publications/p550/ch04.html#d0e8949

IRS FORM 6781:
http://www.irs.gov/pub/irs-pdf/f6781.pdf

Article discussing IRS Section 1256 treatment:
http://options2.registeredrep.com/

CBOE "Taxes and Investing" document:
http://www.cboe.com/LearnCenter/pdf/TaxesandInvesting.pdf

Motley Fool article:
http://www.fool.com/taxes/2004/taxes041015.htm

Listing of Exchange-Traded Index Options from Twenty-First Securities Corporation:
http://www.twenty-first.com/exchange-traded_index_options.htm


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I distinguish Dan's mentoring programs from others by the thorough and disciplined approach to the options trading. Particulary I liked how the trading methodology is linked to the OptionVue, and how adjustments and opportunities are determined. This leaves no space for emotions and brings joy into your life. It would be hard to possess this knowledge on my own.
Volodymyr T : Toronto, Ontario : Canada


I can assure you that I have learned more in the last couple of months watching Dan teach via the webex's, and networking w/current students than I have in the previous year on my own. I can undoubtedly see that this will be the best investment into my option education ever. Dan is a very genuine person, and sincerely cares about the success of each and every one of his students. I look forward to shaking his hand in person one day, and can unequivocally recommend his course to anyone considering it.
Kevin S : Gilbert, AZ : USA
I first learned about options trading on TV. Then I attended one of those Motivational seminars were you go to get fired up. There I signed up and for a three day class and learned some basics about charting, and options. I left and got some books on options trading to expand on the basics. After a few weeks of reading I began trading. With just a basic knowledge I was dangerous. I Lost most of the start up capital. That's when I convinced myself "I needed some help". I attended several free options courses where the Sales team encouraged you to sign up for more. Which was a turn off. I found the CBOE Options Institute and there I learned of Dan's Webinars and his program. After viewing all of Dan's programs. I called and learned more about his program. I'm approaching a year with Dan's program and It has made a difference in my trades and life. Dan is your coach he tells you where you need work and what needs to be done to improve.


Best Regards,
Dave V.
Options Trader for Life
Dave V : Lutz, FL : USA


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