I focus on very short term trades, hours to days, and yes its not tax efficient. I sell out of things too early most of the time but i am always in the market looking for the next deal. I just shoot off limit orders slightly below market and if it fills i immediately send profitable resell orders.You sold for a 7%gain, then taxes?
Today's Tesla put sale for example, $25 premium paid to me and about an hour later the stock went up and therefore the put price dropped. I closed it for $18 pocketing $7x100 minus fees. I coulda gotten it back for $12 if traded perfectly, but perfection is hard. Tesla started dropping near the close so i was able to sell the same put at a $25 premium again.
Tomorrow i'm expecting Tesla to rebound a bit, the upward move on the shares combined with one less day before expiration (This Friday!) will shred the put value.
If i am wrong i will be forced to buy 100 shares tesla at an effective $975 price come friday. I doubt that will happen, and if it does, it will bounce back fast. If i am wrong again by Monday i can sell a covered call option for like $1050 strike that week and get a nice premium further reducing my cost. Eventually i will be out of the trade well ahead. Unless Elon tweets out that he's quitting tesla or something lol.