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A 1256 Contract, as defined in section 1256 of the U.S. Internal Revenue Code, is any regulated futures contracts, foreign currency contracts, non-equity options (broad-based stock index options (including cash-settled ones), debt options, commodity futures options, and currency options), dealer equity options, and any dealer security futures contracts.
For a stock option to qualify as ISO and thus receive special tax treatment under Section 421(a) of the Internal Revenue Code (the "Code"), it must meet the requirements of Section 422 of the Code when granted and at all times beginning from the grant until its exercise. The requirements include:
For exchange-trade options, the fulfillment of the option contract is guaranteed by the Options Clearing Corp. Tax issues: There are a variety of differences in the tax treatment of ESOs having to do with their use as compensation. These vary by country of issue but in general, ESOs are tax-advantaged with respect to standardized options.
Put option: A put option gives its buyer the right, but not the obligation, to sell a stock at the strike price prior to the expiration date. When you buy a call or put option, you pay a premium ...
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Collars, a hedging strategy combining puts and calls, is getting more popular, said bankers. This enables companies to participate in any rise in a currency, unlike forwards where the exchange ...
Option contracts may be quite complicated; however, at minimum, they usually contain the following specifications: [8] whether the option holder has the right to buy (a call option) or the right to sell (a put option) the quantity and class of the underlying asset(s) (e.g., 100 shares of XYZ Co. B stock)
Put protects downside while call premium offsets cost of buying put. Gains capped if shares called away. Loss of dividends from assignments. Long Straddles. Speculation. Buying call and put ...