When you make an options purchase, it means that, as the buyer, you have the right to buy/sell an underlying asset at a predetermined price and within a predetermined period of time.
This contract involves paying a premium comparable to the price paid for shares.
Subsequently, the options can be sold and the tax treatment is identical to that which occurs when buying and selling stocks or bonds; that is, there will be a capital gain or loss based on the comparison between the purchase and sale price.
It is also possible that the options are not sold and reach expiration. In this case, several possibilities must be considered:
a) The options are not exercised because it is not in our interest: there is a capital loss for the value of the premium paid when the option was purchased.
b) The options are exercised, these being cash-settled options (MINI-IBEX-35 options): An investor with bullish expectations bought three MINI-IBEX-35 call options, with an exercise price of 7500, expiring in December. To do this, he has to pay a premium of 60 points (its value in euros per contract is 60 x 1). A total of 180 euros was paid for the three contracts. If, when exercising the option at expiry, the difference between the cash-settled price at expiry (7800) and the exercise price is, for example, 300 points, the cash-settled profit in our favor will be 3 x (7800-7500) = 900 euros (300 x 1 x 3 contracts). From this profit of 900 euros, the premium initially paid, which amounted to 180 euros, must be subtracted. Therefore, the total profit will be 720 euros (900-180).
c) The options are exercised, these being settled by delivery (stock options):
– Let's assume we buy call options on BBVA: Upon exercise, 100 BBVA shares will be purchased at the fixed strike price, for example, 14 euros. The premium paid when entering into the contract was, for example, 1 euro per share (considered a higher purchase price), therefore:
Purchase of shares 1.400 euros
Bonus 100 euros
Total cost 1.500 euros
When these shares are sold, a capital gain or loss will occur depending on the price at which they are sold.
– Let's suppose we buy put options on Repsol-YPF:
If the right is exercised, 100 Repsol-YPF shares will be sold at the fixed exercise price, for example, 17 euros. The premium paid when entering into the contract was 2 euros (considered the lower selling price), therefore:
Sale of shares 1.700 euros
Bonus 200 euros
Total net sales 1.500 euros
This sale amount will have to be compared with the cost of the shares we are selling, in the same way as in any stock purchase and sale.
There are two possible scenarios:
1. Imagine having a portfolio of 100 shares before purchasing the put option: Let's imagine you owned Repsol shares purchased several months earlier at a price of €12 each, resulting in a total outlay of €1200. Now, by exercising the put option, you sell them at €17 per share. The resulting profit is as follows:
Purchase of shares: 1.200 euros
Sale price
premium paid 1.500 euros
Capital gain 300 euros
2. If the buyer does not own the shares when purchasing the put option: In this case, before or simultaneously exercising the right to sell the shares, the shares must be purchased on the spot market. The buyer exercises their right in this case if the share price is trading below the strike price.
Assuming Repsol-YPF shares are trading at 13 euros, the result would be:
Purchase of shares 1.300 euros
Sale of shares – premium 1.500 euros
Capital gain 200 euros
If the difference had been negative, it would be a capital loss, deductible from capital gains or income according to the general rules of the Tax.
Futures
The futures contract implies the obligation, for the buyer, to purchase an underlying asset at a certain price and within a predetermined period of time (or when the contracts are settled by differences, to comply with such settlement) and vice versa for the seller.
In principle, no tax obligations arise until the position is closed, since until that moment we do not know whether there has been a profit or a loss.
In an IBEX-35 futures contract, you obtain a spread that will be positive or negative depending on the price at which the initial operation is carried out, buy or sell, and how the index evolves until the day the position is closed (or until the expiration date).
Example IBEX-35 futures contract: Let's imagine the IBEX-35 futures contract is currently trading at 9.000 points and we buy one contract. On the expiration date, the settlement price of the index is 9.040 points, resulting in a positive spread of 40 points (the same applies if we sell at 9.040 before the expiration date). To obtain the contract's notional value, we need to multiply the spread by the IBEX-35 futures multiplier. The settlement will therefore be €400 (40 x 10) in our favor, which constitutes the capital gain.
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