I know there are certain rules. Here are some of them that I found on the IRS’s website, main point being, does Nadex qualify as “securities”? I know there was a thread on here that says Nadex must be regarded as swaps? How does that play in here?
Traders Special rules apply if you are a trader in securities, in the business of buying and selling securities for your own account. The law considers this to be a business, even though a trader does not maintain an inventory and does not have customers. To be engaged in business as a trader in securities, you must meet all of the following conditions:
You must seek to profit from daily market movements in the prices of securities and not from dividends, interest or capital appreciation; Your activity must be substantial; and You must carry on the activity with continuity and regularity. The following facts and circumstances should be considered in determining if your activity is a securities trading business:
Typical holding periods for securities bought and sold; The frequency and dollar amount of your trades during the year; The extent to which you pursue the activity to produce income for a livelihood; and The amount of time you devote to the activity.
What do you all think?