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regularity of the taxpayer’s securities transactions.” Moller v.
United States, 721 F.2d 810, 813 (Fed. Cir. 1983). In general,
investors purchase and hold securities “for capital appreciation
and income” whereas traders buy and sell “with reasonable
frequency in an endeavor to catch the swings in the daily market
movements and profit thereby on a short-term basis.” Liang v.
Commissioner, 23 T.C. 1040, 1043 (1955). For a taxpayer to be
considered a trader, the taxpayer’s trading activity must be
“substantial”, and it must be “frequent, regular, and continuous
to be considered part of a trade or business. * * * Sporadic
trading does not constitute a trade or business.” Boatner v.
Commissioner, T.C. Memo. 1997-379, affd. 164 F.3d 629 (9th Cir.
1998); see also Commissioner v. Groetzinger, 480 U.S. 23, 35
(1987) (“We accept the fact that to be engaged in a trade or
business, the taxpayer must be involved in the activity with
continuity and regularity * * *. A sporadic activity * * * does
not qualify.”).
B. Application of Trader Status Criteria to Petitioner
Respondent concedes that for “parts of the months of
February, March, and April, petitioner engaged in daily
transactions.” It also seems clear that, during those 3 months,
petitioner satisfied the first requirement for trader status,
that he buy and sell with frequency in order “to catch the swings
in the daily market movements”. See Liang v. Commissioner, supra
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