Effects of taxation for option writers: an Australian perspective

Karen Alpert and Warren James Knight

Accounting and Finance, 2007, vol. 47, issue 1, pages 23-45

Abstract: Writing an option is a taxable event for Australian investors. This method of taxation penalizes investors who hold open short option positions over the tax year end by accelerating their tax liability relative to the timing of the economic gain from writing options. This paper examines the levels of open interest in the Australian Stock Exchange over the change in financial year to determine whether investors time their transactions to avoid this tax acceleration. The results show that level of open interest is lower in the last month of the financial year after controlling for non-tax determinants of option demand. Copyright (c) The Authors
Journal compilation (c) 2007 AFAANZ.

Date: 2007
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-629X.2007.00210.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:acctfi:v:47:y:2007:i:1:p:23-45

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand
Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().