The IRS looks to the number of trades made rather than the number of total contracts. The IRS wants to see one or more trades every day with no sporadic lapses.
Part time traders with other jobs can qualify for trader tax status but the bar is raised, since the IRS is more skeptical.
You could have traded a large number of contracts once per week with longer term holds and that would not qualify.
There are many factors including number of trades, hours per day, expenses, intention to run a business, holding periods and more.
The decision is as much an art as a science.
Learn more about trader tax status in IRS Publication 550 Chapter 4 Special Rules for Traders available at
www.irs.gov.
We cover it in much more depth in my book The Tax Guide for Traders in Chapter 1. The Gold Package has the book plus all our tax examples guides, including our Commodities, Futures and Forex Guide.
http://www.greencompany.com/Traders/Guides.shtml.
When in doubt its best to have a 30 minute consultation with me to assess whether or not you have trader tax status and to cover other trader tax benefits as well.
http://www.greencompany.com/Traders/...nsulting.shtml
Thanks.
