Options at Interactive Brokers: Tax in Germany

Interactive Brokers is frequently used precisely because the broker is very well suited for options trading, international markets, and active strategies. At the same time, this creates several tax case categories, each of which is treated differently.

Typical constellations include:

• Buying a call option (Long Call)
• Buying a put option (Long Put)
• Selling a call option (Short Call / Writer)
• Selling a put option (Short Put / Writer)
• Closing transaction
• Exercise
• Cash settlement
• Worthless expiration
• Assignment
• Combined strategies such as spreads, straddles, or strangles

When you buy a call option, the paid option premium is initially not an immediately taxable loss. It is first considered acquisition costs of the option right. Fees, commissions, and similar transaction costs are also included.

For you as a user, this means pragmatically:

• Purchasing the option does not automatically create a taxable result.
• The paid premium initially forms the cost basis of the option right.
• The transaction becomes tax-relevant later – for example upon sale, closing, exercise, cash settlement, or expiration.

If you sell a call option before expiration or close it through an offsetting transaction, the tax result arises at that moment.

The relevant factor is then the difference between:

• your acquisition and incidental costs of the option
• and the premium or proceeds from the sale or closing

For many IBKR users, the writer case is particularly important. If you sell a call option and receive a premium for it, this received premium (Stillhalterprämie) is the first tax-relevant amount.

If you later make a closing transaction and pay a premium for it, this payment has a correspondingly offsetting effect.

If as the writer of a call option you must provide not delivery but a cash settlement, this cash settlement is also tax-relevant.

If you exercise a put option and deliver the underlying asset, the key practical point is: this constitutes a sale of the underlying asset for tax purposes. The costs of the option right are taken into account when determining the gain at the level of the underlying asset.

If you receive a cash settlement instead, this cash settlement is recorded for tax purposes and the costs of the option are offset.

If the holder of the put option exercises and you as the writer must take delivery of the underlying asset, this is practically an acquisition of the underlying asset. The already received premium remains a separate tax event and is not factored into the capital gain upon a subsequent sale of the underlying asset.

Many users do not trade isolated individual options but strategies such as:

• Spreads
• Straddles
• Strangles

Important here: such strategies do not simply consist of "one trade" for tax purposes, but of several individual base transactions. For the analysis, this means that paid or received premiums must be distributed among the individual components and the transactions must be considered individually.

The greatest difficulty at Interactive Brokers is rarely just the sheer number of trades. It becomes complex above all because options can end in very different forms:

• Premium received as a writer
• Option purchased and later sold
• Closing transaction
• Worthless expiration
• Cash settlement
• Exercise with purchase or sale of the underlying asset at the strike price
• Assignment with booking or delivery of the underlying asset
• Strategies with multiple legs

For tax purposes, it is therefore important that not only the position as a whole is considered, but that the individual events are cleanly separated.