A similar question recently asked about stock sales and option buys triggering wash sale rules.

If an option expires, is that considered a buy/sale ?

What I mean is: let's assume I have a call option with a target date of August 16. Now I sell the underlying stock somewhere before that (after July 16th). Does that trigger wash sale rules (if the option expires in the money, exercised by default) ?

Is an option expiring out of the money considered a sale ?

1 Answer 1


Expiration is a closing transaction and is considered to be the sale date of a long option and the purchase date for a short option (proceeds are zero if OTM).

The rest of your question is missing details.

"If the option expires in the money", did you sell to close? If so, was there a gain or a loss? If not, you accepted auto exercise. Did that close an existing underlying position or did it lead to a new position in the underlying (premium is then folded into the underlying cost basis)?

Is there a loss on the stock? If so, what are the transaction dates? IOW, August 16th is more than a month away so selling "the underlying stock somewhere before that" could be in or out of the 30 day wash sale violation time frame.

As is, this part of the question is unanswerable.


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