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

You will discover two principal types of essential options contracts: phone calls and puts. The difference is exactly what each enables you or A further occasion to accomplish. Contact options presents the best of more info the option consumer to buy the underlying asset and obligates the choice seller to provide the fundamental asset at a specific rate (determined by the strike price) because of the expiration date.