using future index vs etfs

[NitroZ7]

Was thinking of converting some of my SPY into the equivalent SPX calls/puts. My understanding is the SPX is European style, cash settled and gets the 1256 tax treatment where the premium is taxed as 60 percent long term capital gains and 40% short term. Anyone use these for option writing? I may use the minis so I can write at different strikes at the same time since the SPX is pretty pricey.

[boneil]

Never done it. But are you sure that options on the futures contract gets the tax treatment? I don't know.

There are also the micros, 1/10th the size of the minis. And requires less margin.

[NitroZ7]

Never done it. But are you sure that options on the futures contract gets the tax treatment? I don't know.

There are also the micros, 1/10th the size of the minis. And requires less margin.

The minis definitely seem to be the way to go. I hold a long position in SPY so the minis seem to track the price since it is 1/10. The tax treatment is for future index options. CBOE has it listed on their site with an explanation of the tax benefits to using the index options versus SPY. I noticed that NUSI and JEPI both use the index options SPX and NDX instead of the ETFs and I found out that the tax treatment was the reason.