![]() With the recent advent of Robinhood, one of the first online trading platforms to allow its retail clients to place trades with $0 commissions, day trading became accessible globally to the general population. The day trader's intent, of course, is to buy an asset for a low price and sell it at a higher price within a short time frame (in the case of a long position a short position does the same in the opposite order).Īn increasing number of online brokers provide software and platforms for day traders, who can use margin loans from the brokerage to increase their buying power to sometimes three to four times their own equity capital. ![]() Positions are typically held for as little as a few seconds (known as scalp trading) up to several days (known as swing trading). THE POPULARITY OF DAY TRADINGĭay trading typically refers to active trading by retail or proprietary traders who take short- term positions in any of a broad class of financial assets, including traditional stocks, bonds, currencies (including virtual currency), commodities, futures, and, increasingly, options on these assets. 475 election versus not making the election. ![]() Practical examples are provided to illustrate the tax difference between making the Sec. In this article, we offer some thoughts on day trading from a tax planning perspective. One important area in which this steadily growing group of clients may need advice is whether to make a Sec. Because the tax rules surrounding day trading can be murky and complex, clients who day- trade as either a primary or secondary source of income may require the services of a tax professional. The proliferation of retail trading has brought challenges as well as new opportunities for accountants.
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