Lets say I bought a stock option for $X and sold for $Y, and profited $10,000 total.
A few days later, I realize I want back in. I use the $10,000 and buy an option for the same stock. The stock goes down and the option is virtually worthless.
What is my total tax liability? Would I be able to deduct the loss from my initial gain? Or would i be effed with a $0 profit, but a $10,000 tax liability?
If the latter, does that mean anytime you roll your options, you trigger the wash sale rule and are unable to deduct your loss from prior gains
