did you make a proper 475(f) mark-to-mark election with your timely filed (ignoring any extensions) 2020 return or did so in earlier years? any election, which only goes into effect in the following year, filed after the original due date of the return containing the election is null and void.
if no valid election your trades even as a day trader are capital gains/losses and subject to the wash sale rules.
even as a "data trader" do you meet the criteria to make a valid election
here's what the IRS looks for
You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
Your activity must be substantial; and
You must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if your activity is a securities trading business:
Typical holding periods for securities bought and sold;
The frequency and dollar amount of your trades during the year; (must professional say the minimum number of trades should be over 1,000 per year (one special case allowed about 700)
The extent to which you pursue the activity to produce income for a livelihood; and
The amount of time you devote to the activity.
If the nature of your trading activities doesn't qualify as a business, you're considered an investor and not a trader. It doesn't matter whether you call yourself a trader or a day trader, you're an investor. A taxpayer may be a trader in some securities and may hold other securities for investment. The special rules for traders don't apply to those securities held for investment. A trader must keep detailed records to distinguish the securities held for investment from the securities in the trading business. The securities held for investment must be identified as such in the trader's records on the day he or she acquires them (for example, by holding them in a separate brokerage account).
if you made a valid election, the reporting is not done on form 8949 or schedule D. it goes on form 4797. all these trades are ordinary income. at year-end you must take into account the unrealized appreciation or depreciation in the value of securities you are holding for trading. the wash sale rules d not apply. no SE tax.
