This is an actual trade that I made yesterday for a covered call contract for EOG shares that I own.
It's like a short sale but the option is what was sold and I can buy it back later before expiration.
From my broker: You sold to open 1 contract of EOG Dec 16 2022 123.5 Call at $11.41 on 10/04/2022.**
The bid and ask are 11.80 and 12.10, so I'm down a few dollars and I can buy it back if I think it's going in the wrong direction.
I own 100 shares so 1 call contract can be assigned 100 shares at the 123.5 price if it is in the money.
In this case I don't have to make any trade since it will be assigned on expiration date.
If it is not in the money it will expire worthless and I keep the $11.41 x 100. I don't have to make any trade either.
If the call contract that I sold goes down in price I can buy to close and keep the profit at any time
If the call contract that I sold goes up in price I can buy buy to close and take the loss if I think it is better to own the shares.
It is similar to a short but it is a hedge if I expect the shares to go down.
In either of these two cases the buy to close is after the sale to open. This is the problem I had last year. TTax showed the sale but was saying that the buy date had to be before the sale date. You can see that the sale is made and the buy did not happen yet. This year since I have the $169 premium version I want to know how this is going to be handled. And I will have your accountant support that comes with it.
Can you tell me what to expect your accountant to do or if the software will handle it correctly this time.
