Hello, I’m not new to options and options strategies but I’m considering executing a long box spread for the first time and have some questions. On paper, this strategy seems like a no brainer when comparing to treasury bills or bank CDs especially when I’d like to park money for a few months and even considering Illinois state tax.
How are taxes usually dealt with when SPX options are marked at the end of the year? I’ve never held an SPX option through year end and have to deal with it for taxes.
Are there any other hidden risks that I’m overlooking besides execution errors when using SPX?
I’m looking at 17 Sep 27 7000/8000 strikes. They have high OI on the third Friday which makes me believe this strategy is popular here.
Slightly off topic, I had a short term margin loan from Schwab at 12%+ and was able to sell a three month spx box spread bringing the loan down to under 5% which was really cool to figure out.