It is unlikely that you would qualify as a "Trader" and be treated as a sole proprietor. According to the IRS:
Special rules apply if you're a trader in securities, in the business
of buying and selling securities for your own account. The law considers
this to be a business, even though a trader doesn't maintain an inventory
and doesn't have customers. To be engaged in business as a trader
in securities, you must meet all of the following conditions:
- 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;
- 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).
Traders report their business expenses on Form 1040, Schedule C (PDF), Profit or Loss
From Business (Sole Proprietorship). The Schedule A limitations
on investment interest expense, which apply to investors, don't apply
to interest paid or incurred in a trading business. Commissions and
other costs of acquiring or disposing of securities aren't deductible
but must be used to figure gain or loss upon disposition of the securities.
See Topic 703, Basis of Assets. Gains and losses
from selling securities from being a trader aren't subject to self-employment
tax.
For additional information see IRS Topic 429 - Traders in
Securities
