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trader on the floor of an exchange who buys and sells options
acts as either a market maker, a specialist, or a floor broker;
(2) an options market maker is a trader on the floor of the
exchange who buys and sells options either for his or her own
account or for the accounts of others and who competes with other
options market makers to make a market in various options that
are traded on that exchange; (3) as an options market maker,
during 1986 Mr. Gordon purchased a particular option at a certain
bid price, owned that option for his own account, expected to
sell it at a slightly higher offered price, and took a position,
that is, held an option, with a profit expectation derived from
the fluctuations in the market; (4) Mr. Gordon bought and sold
over 50,000 option contracts during 1986 in the normal course of
his trade or business as an options market maker; and (5) Mr.
Gordon sustained a net trading loss of $319,973 during that year
from his activities as an options market maker.
Based on our review of the entire record before us, we find
that, pursuant to section 1256(f)(3)(A), the 1986 net trading
loss that Mr. Gordon realized from selling options as an options
market maker is a loss from the trading of section 1256 contracts
that is treated as a loss from the sale or exchange of a capital
asset.
As we understand Mr. Gordon's position, he appears to
contend that, even if the Court were to find that, pursuant to
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