Jump to content


  • Posts

  • Joined

  • Last visited

Everything posted by hyten1

  1. Eric I am not sure why the author mention the 31 days, I don’t think you need that, maybe contact author for clarification or someone else my understanding is that, the asymmetry factor applies, and that is all you need in this case: sell stock -> buy call (wash sale) sell option (you own calls) -> buy stock (no wash sale) It seems where you take the lost determines if wash sale rules applies or not. Selling option at a lost is different than selling the stock at a lost. this is my current understanding, correct me if I am wrong or missing something
  2. one page 4 the author acknowledge the problem that we currently have, option to equity doesn't trigger wash sale, page 4. Fortunately, current law already comes to the right answer in some cases. Most importantly, it finds a wash sale when stock is replaced with a call option. Commentators generally attack this result as overbroad, since options are economically different from stock. In response, this Article defends this widely criticized rule, showing that it is appropriate in light of our system’s generous treatment of gains. Of course, other aspects of current law do not conform to the “call spread” theory. In response, this Article recommends specific changes (or at least clarifications) of current law. For instance, a wash sale should be triggered when stock replaces a call option, when a put option replaces a short sale... on page 27 note 63, There is an asymmetry in applying the “substantially identical” test to stock and options. According to Rev. Rul. 56-406, sorry eric, this is all have, if you find anything more let me know
  3. haha, agree. the paper somewhat addresses why wash sale rules exist in the first place, and why your above senarios doesn't also even if I am interesting in skating right up to the edge, the thought of having to file this manually to counter what td or fidelity sends to the IRS gives me a headache (I am assuming td/fidelity won't match up the equity with the option trade unless I am wrong)
  4. yeah I agree, this is why I won't be doing this anytime soon, also back to the spirit of the law. I am sure some hedge funds are skating right up to the the edge, the CFO friend I know, he doesn't do it, but he knows many who does, he has also been offer this advice from various lawyers that he has encounter throughout his career. i don't know how tdamertriade, fidelity, etc. handle this in their system, if they don't match up the right transaction you won't be circumventing wash sale via what they send to the IRS EDIT: also if you are interested I think the rest of the paper might provide some clue as to why equity to option is consider a wash sale but option to equity is not.
  5. eric, i see, my point is that the law is not clear, if the following is true, Buying a call after within 30 days of selling a stock at a loss will trigger a wash sale, however, having a call and expiring/selling at a loss and then buying a stock will not create a wash sale. you would think otherwise!!! but apparently it is. i spoke to the CFO again, he said this is a well known way people get around the rules. I am not a lawyer so I am not sophisticated enough to read up all the laws and figure out why this is the case. on another note, just because a sophisticated investors does it doesn't mean it'll be easy for us, given most of us trade via Fidelity, Tdameritrade etc. not sure how their system handles these situations (will they match the sell of stock with the corresponding buy of OTM calls?) if their system doesn't handle it automatically you'll have to deal with it manually via tax filing which can be a pain in the ass. And I highly doubt my current tax account know about this.
  6. ERIC you are right, the law seemingly contridict itself, this is what someone told me from a CFO level guy at a hedge fund Buying a call after within 30 days of selling a stock at a loss will trigger a wash sale, however, having a call and expiring/selling at a loss and then buying a stock will not create a wash sale. you would think it should work both ways, but apparently it doesn't! I obviously have never tried this
  7. here is a good paper on the topic especially the section "III. Perfect End-Runs Around the Wash Sale Regime" https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=3484&context=faculty_scholarship there is definitely ambiquitiy within the law, thats why these so call loophole/workaround exist you can either stick to the spirit of the law or attempt/apply these loopholes, thats what the discussion in this thread comes down to
  8. flu kills 10k to 50k people per year, so on the low end flu kills less than 1k per month and at the high end it kills 4k per month (this is with vaccine). so most likely without vaccine it would be more, how much more? covid19 has kill so far 11k people across US for almost a month worth of time. you can argue it could be more due to the timing and as well the effect of stay a home (flu has no stay at home). so covid19 is 10x to 2x worst than the flu (given flu has vaccine and covid19 has stay at home)
  9. game changer, we need this https://www.surescreen.com/products/covid-19-coronavirus-rapid-test-cassette
  10. does anyone have any gdp data either from south korea /japan/taiwan, we can include china if we can believe it. I would like to see what is the total hit to gdp thus far and in total for 2020 (forecast). I assume this gives us some idea how much of a gdp hit will US experience and we can then extrapolate how much of a hit to the stock market so to get an idea will this be a 30% peak to through or a 50% peak to trough market downturn before its near a bottom? or will this be worst than that?
  11. interesting facts (people will say chinas data are not trustworthy, maybe), beijing has 8 death, shanghai has 3 deaths so far (3/2/2020 10pm), these are 2 mega city with population of over 20 million people each. not saying we have nothing to worry about, the outcome obviously depends on how the situation is handle by the authorities etc., nothing is guarantee or a given. EDIT: either you don't believe anything out of china, or this is an illustration of what can happen if the authorities act quickly etc. EDIT 2: if you don't believe data from china, there is taiwan, japan to look at, both have large cities (obviously outcomes is highly dependent on how the local authorities handle the situation).
  12. https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6
  13. here are some good info, if you can read it https://www.nytimes.com/interactive/2020/world/asia/china-coronavirus-contain.html?action=click&module=Top%20Stories&pgtype=Homepage?utm_source=digg
  14. in the the days of social media any tiny bit of (miss)information can be spread throughout the entire population in an instance especially when fear is involve. just look at NYC today, a rumor of first case in queens was supposedly reported (spread like wildfire on social media), however it has been denied by the officials. now some will say, "oh the officials are covering it up", but we have to be calm, take a deep breadth, take precaution, but lets not create a panic and create more issue than it really out to be. https://www.forbes.com/sites/sergeiklebnikov/2020/01/31/nyc-officials-deny-report-of-coronavirus-amid-confusion/#66c78e01652c some will argue official are banning people from talking about this on wechat, look the big government is at it again, a cover up, but lets take everything with grain of salt. there are good reason why this might of been done (we don't really know if it censorship or good common sense). panic can be spread very very quickly in days of iphones, social media. EDIT: my mom was at a supermarket today (regular american supermarket) while she was leaving the checkout counter, she cough (she is 80 an old chinese lady), she barely had a chance to raise her arm up to cover her mouth (she was holding 2 bags of things she bought from the supermarket). The cash out counter lady yelled at her and said, cover your month when you cough. Now this could just be normal behavior (anytime you cough you should cover your mouth), but then again this has never happen to her before, you can't but wonder why.
  15. i hear what you are saying, I am also chinese. I just think being calm, take in all the facts, (anecdotal is fact as long as you don't extrapolate it to the extreme) is the right way to do it. you said it gives you an edge, perhaps, but it can also create undue fear and make you do things that you might not have done out of fear. obviously i have no idea how this will turn of, every trade you have done could all be winners due to your chinese edge, then again it could not be, it might of cause you to overreact. Yes I understand better safe then sorry etc. etc.
  16. BG2008, i agree, but why create fear and throw out numbers when the numbers are pure speculation. sure you can tell anecdotal situations. lets not put words in my mouth, or insinuate whatever you want to insinuate on what i said. death rate can be a lot higher so can infection rate, its the ratio that really determine the severity of this virus. since we have no idea what these numbers are creating fear and panic doesn't do anyone any good. I am not saying walking around like nothing happens or only do something until the "facts" are in. You are not the only who reads, I am aware of all these things you stated. Inversion is not a concept that so difficult that escape my thought process. Hyten, I think you are thinking about this matter a little bit too much in the ways like a value investors who invested with Chinese RTOs in the 2011 to 2012. I have been following Chinese WeChat and talking to people on the ground. Shanghai is a pretty much a ghost town now. No one goes downstairs from their apartment. You can call that heresay. But I tend to trust my wife's friend who works for a biotech company in the US who has a PhD that it is a ghost town. The facts are that they quarantine an area that has the population of New YOrk City, LA, and Chicago and still has 10mm pop left. That's a fact. I am not surprised at all if there were 100k infected in WuHan. It's $10k RMB to stay at an ICU in China. So $1.6k USD. Most of the population can't afford that. There are definitely a lot more infection and death than the numbers that are official. Talk to a value investor in the western world, they pound the table and say "Don't fear monger, give me the facts." Talk to any Chinese person (wife and I are both Chinese) and we just know that the numbers are way more serious than the official stats. People have mentioned that the cause of death on certificates are often Pneumonia not Corona Virus despite the doctors telling family that it was definitely Corona virus. Why do you think the Chinese government is willing to shut down such large portion of its GDP? Don't be so dogmatic with the numbers and FACTs. Learn to be a bit flexible with it and bake in a large range of potential figures. Both the death rate and the infection rates are likely much larger. Invert the think, if the infectiousness isn't bad, will the Chinese government go to such length to quarantine? If the death rate isn't bad, will the Chinese government go to such length to attack this? To a certain extent, the reactions are likely over blown at this point, discount the seriousness by 50% and it is stil pretty bad. Yes, the death figure lags by quite a bit.
  17. please provide facts, not speculation and fear mongering. If there are 1 million infections (hypothetical to illustrate a point) without additional deaths that is actually a good thing, that means this virus is not as deadly as we thought it could be
  18. i think misunderstood is rare, however i do think there are times when wall street (humans) think something will happen a lot quicker than it actually does, some examples are: - hard drives (hard drive will be obsolete next year!) - dare i say autos (ev, uber will take over the world, no one needs autos anymore, time will tell) - cable (cord cutting will decimate their biz) hy
  19. MrB agree WDC is cheap, but so are others in the space. not saying its not a good buy. I have been nibbling at this as well as at MU, NXPI etc.
  20. at least for me, certainly feels that way, my portfolio stinks, while nasdaq is still up 6% ytd (approx)
  21. https://aws.amazon.com/blogs/security/setting-the-record-straight-on-bloomberg-businessweeks-erroneous-article/
  22. for someone who doesn't want over exposure to individual companies through the typical s&p500 etf you can buy equal weight etfs not saying the index are cheap or expensive, with equal weight etfs you get rid of the over exposure to "one/few" company problem
  23. or you can open up online saving account (for PA), many provide 1 to 1.30% on saving rate. open up a few if you need it so you don't go over the 250k fdic insured limit
  24. i am no expert, but i question the slavery as positive for wealth (depends on how you define wealth, per capita? net? or just one big number?). if you think about it, there is pretty much slavery (or very close to it) in some shape or form everywhere throughout history in all countries. maybe its net positive for wealth. even if we are not sure if its positive, doesn't this pretty much even out for everyone (pretty much all countries had slavery, some still do) i attribute US's wealth to: democracy, free market, large resource/nation, diversity of people (i can't think of another nation that have all this) Slavery was a major factor in wealth creation at the top end, and led to fast economic development. The whole damn civil war was about slavery allowing the south to economically supercede the north. As to everyone arriving equal: Tell that to the irish who were pressed off the boat in the civil war, Japanese in internment camps, Eurpoean immigrants after WWI, Arrivals at Ellis Island, Black slaves, Jews that couldn't get hired on Wall Street.......
  • Create New...