Disscussion For The Long Term Bulls. SNORT!
#1
Posted 13 January 2007 - 10:44 AM
#2
Posted 13 January 2007 - 11:35 AM
There are tax advantages to holding futures, for periods less than a year, however there is a cost to
margin; And if you are a long term bull and you plan to hold for longer than a year what is the cost analysis to holding spy vs SP futures; Dow vs DJ;?
Ok: to start;
1) Taxes: You have to define your period of bullishness; longer than one year, less than one year;
2) How bullish: The cost of margin vs the gain with the extra leverage; Slope of the price curve and dividends important here as well as the cost of the margin.
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#3
Posted 13 January 2007 - 03:56 PM
There are tax advantages to holding futures, for periods less than a year, however there is a cost to
margin; And if you are a long term bull and you plan to hold for longer than a year what is the cost analysis to holding spy vs SP futures; Dow vs DJ;?
I have seen people lose incredible amounts of profit and even a winner to a loser by just trying to hold for a long term versus a short term gain.
Best to take the profit when offered and be happy that it is a gain. If it works out to be a long term gain so be it, but do not try to hold beyond a reasonable sell point to get the tax benefit. In most cases a person would have been net ahead to pay the short term rate.
KC
#4
Posted 13 January 2007 - 05:09 PM
There are tax advantages to holding futures, for periods less than a year, however there is a cost to
margin; And if you are a long term bull and you plan to hold for longer than a year what is the cost analysis to holding spy vs SP futures; Dow vs DJ;?
I have seen people lose incredible amounts of profit and even a winner to a loser by just trying to hold for a long term versus a short term gain.
Best to take the profit when offered and be happy that it is a gain. If it works out to be a long term gain so be it, but do not try to hold beyond a reasonable sell point to get the tax benefit. In most cases a person would have been net ahead to pay the short term rate.
KC
Thanks KC; Yes; Makes sense. Here is where I'm coming from:
We know buy and hold works historicly.... But buy and hold with margin? I am just
curious. I hear people snorting talking about a buy price many many moons ago and holding
contracts..... If you are that bullish, does it even make sense to hold with margin.... Clearly you have
to have a model you play to. I'm asking for those people to share that model with us (and if not us me; lol).
I am ST (next 8 days) bullish here (BTW), but I'm trying understand (and possibly gain from) the longer term margin game. I can think of a few arb situations to avoid a few tax dollars in the instances where you turn bearish. I just wonder does any one play that angle, and what about these long term contract holds...
jjc
#5
Posted 13 January 2007 - 10:18 PM