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I bought some call options earlier this year that have dropped to zero value. I've tried several times to sell them at market, but I have seen zero buyers.

I would like to sell them or have them declared worthless this year so I can take the tax loss. Unfortunately, my broker seems setup to handle worthless stocks but not worthless options.

They are currently researching the issue and hopefully they'll find a way to dispose of them for me but the broker on the phone didn't sound very optimistic... Short of finding someone else to purchase my contracts for a penny (and paying a commission many times that).

Is there a standard way to get rid of worthless option contracts before their expiration date?

Thank you in advance for any help that you can give with this!

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    Are the options truly worthless? Is the underlying stock worthless? – Chris W. Rea Nov 29 '16 at 0:17
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    Can't you just wait for them to expire and be subsequently removed? – quid Nov 29 '16 at 3:49
  • Try exercising them if they are American style options – CQM Nov 29 '16 at 8:01
  • @CQM I am pretty sure that the options have zero value because the strike price is now too high compared to the current price of the underlying security. Exercising them will probably be throwing even more money down the drain. – Mindwin Nov 29 '16 at 12:59
  • @Mindwin it will, depending on the liquidity of the underlying and the exercise fees, aside from that the broker will let you float the value of the underlying for a few days and will simply be locking in the known loss and not be increasing it – CQM Nov 29 '16 at 23:04
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Before the expiration date if there is no buyers, there is no market and you cannot sell them legally. When they will expire worthless, you will be able to claim a tax loss. Check this publication from IRS under options

  • They expire in January of next year, but I would like to take the loss this year. I keep putting them out there at market, but can't even get rid of them that way. It would be great if someone, anyone would take them off my hands unfortunately I don't know a lot of option traders otherwise I would ask a friend to buy them and agree to do the same if they needed similar help. – bpowers Nov 29 '16 at 17:30
  • The loss cannot be claimed this year, period. This is income tax law. As for finding a "friend", I am not sure that kind of "friend" exists. Your loss is your loss, accept it. – Armando Dec 2 '16 at 13:35

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