Does the Short-Term/long-Term Distinction Apply to a Professional Trader? ⎊ Path

Does the Short-Term/long-Term Distinction Apply to a Professional Trader?

Yes, the distinction applies unless the professional trader makes the Section 475(f) mark-to-market election. Without the 475(f) election, the trader's capital gains are still categorized as short-term or long-term based on the holding period.

With the 475(f) election, all gains and losses are treated as ordinary income or loss, and the distinction is irrelevant.

What Is the Difference between Capital Gains and Ordinary Income in Derivatives Trading?

How Does the Mixed Straddle Election Relate to Section 1256 Contracts?

Is a Token Grant to a Contributor Considered Ordinary Income or Capital Gains?

Can a Trader Choose to Apply the Mark-to-Market Rule to Non-Section 1256 Contracts?

How Does the “Identified Mixed Straddle” Election Work?

How Are Capital Gains Typically Classified for Crypto Spot Trading?

What Happens If a Trader Does Not Make a Mixed Straddle Election?

How Does the Mark-to-Market Election (Section 475) Change the Ordinary Vs. Capital Income Distinction?

Glossar

Short-Term

Horizon ⎊ Short-term, within cryptocurrency and derivatives, typically denotes a timeframe extending to one month, influencing trading strategies focused on volatility capture and rapid profit realization.

Long-Term

Horizon ⎊ Long-term perspectives within cryptocurrency, options trading, and financial derivatives necessitate a valuation framework extending beyond immediate price discovery, incorporating stochastic volatility models and anticipating shifts in regulatory landscapes.