Let say a trader bought a stock (lets say March 18th 2020) now 11 months later trader wants to protects his/her gains and also want to get benefit of long term tax rates. But long term is only available after 1 year.
Lets say STOCK ABC, bought March 18 2020 for $50.
Now stock is at $160
Trader add a March 19 expiration COLLAR, Sell 170 CALL and Buy $155 PUT for $5.
Now lets say stock fell to $140 at expiration. Trader will be able to exercise $155 PUT but question is how much of this $100 gain ($50 cost of stock + $5 cost of collar, 155 -50 -5 = 100) be long term vs short term gains?
