When exercised, theres no immediate taxable income, and when held with the demanded interval, any gain on sale is taxed as extensive-time period funds gains in lieu of common cash flow.

There are actually two principal kinds of essential options contracts: phone calls and puts. The difference is exactly what each enables you or another occasion to perform. Contact options provides the appropriate of the option buyer to purchase the underlying asset and obligates the choice seller to sell the fundamental more info asset at a selected price tag (determined by the strike selling price) because of the expiration date.