# Tax treatment for put options used for long term investment insurance



## qldfrog (4 June 2013)

Hi,
if you use *put *options as a stop loss for long term investor portfolio, how do you treat them tax wise
case 1:
I buy 200 NAB at 35$, also protect them with matching 200 options at $35 for a cost of $X dollars

when options expire 2 cases:
1) NAB has fallen let's say to $20, I sell my 200 at $35 via option-> I have lost $X dollars (but only $X)
2) NAB went up or stay same: let's say $36, I do not sell anything, but I have lost $X as the options are worthless
how do you treat it tax wise?

case one seems "easy": capital loss of X$ or is it but in case 2??
Any help welcome, and this is not an actual case so prices/nb given as example only


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## qldfrog (4 June 2013)

found that:
http://www.asx.com.au/documents/products/taxation_of_exchange_traded_options_may_2011.pdf
might help


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## qldfrog (4 June 2013)

believe the answers are there, hope it will be useful for others


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