day trading into a business?

3 Answers

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   brad on May 13, 2011 Reply

   I would just be very lucky for your profits if you really earned them and not push your luck. Daytraders will get killed over time due to crooked hedge’s like goldman, jpm, and ms.

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   Common Sense on May 13, 2011 Reply

   The best way to trade is as a business. The exact type would depend on your circumstances.
   I believe you’d be able to deduct all expenses (computer, room, educational costs – the biggest cost for a good trader)…. etc.). With stocks it would be done as market to market. I’m not sure about options…. but I believe it’s the same.

   In this unbelievable bull stock market…. we all look like geniuses. If you totally understand and use “The Greeks” as part of your calculations before making a trade… then a full time trader may be the way to go. If you’ve never heard of the Greeks…. then you’re making money… because everyone is making money…. and options, as a leveraged product……. you make much more. A few months of trading proves nothing. Be careful…… don’t delude yourself…… it can be very costly.

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   A nobody on May 13, 2011 Reply

   “Common Sense” nailed it for you
   You will have to establish another account with your brokerage firm since in all probability you opened the account as an individual you should have the account titled as a new entity.
   You can name the account using your name but should add “trading account” or something similar. This will help you isolate or segregate you “personal” activity from your “business” which will make the tax man’s life a little easier in the event there is an audit, or will let you as an individual maintain an investment account separated from your business.
   I realize we’re splitting hairs, but whatever you can do to keep the tax man happy, do it.

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