2leg options and washsale

[RayZ2]

A 2-leg option (say a put spread) usually has a leg that wins and a leg that losses? How would washsale rule play for these contracts?

[tagteam]

I believe you would have to open a new position on the losing leg within 30 days after expiry.

@Mike9241 ?

[Mike9241]

see this link to see if it helps.

https://fastercapital.com/content/Options-Trading--Navigating-the-Wash-Sale-Rule-for-Derivative-Inve... 

Understanding the definition of substantially identical: The IRS defines substantially identical securities as those that are so similar that they are essentially the same security. For example, a call option on a particular stock would be considered substantially identical to another call option on the same stock, while a put option on the same stock would not. 

however, I have been unable to find an example published by the iRS.

[RayZ2]

Thanks!

To clarify, the 2leg options usually end up with closing both legs at the same time. Say the trader 1st sells $H and buys $L at time 0, then later buys back $H and sells $L later, on most ovations one leg will be in loss and one is profit. Would the leg at loss be considered washsale, given both legs are traded at the same time?

[tagteam]

Not unless you opened a position in the leg that was closed at a loss within 30 days.

[RayZ2]

Yes, seems like if the strike prices are different specially if expiration data is different there is no problem.