1. Susan sells a put to Peter on 6/1/20 and Susan agrees to purchase up to 1,000 shares of Microsoft stock from Peter at $90 per share anytime on or before 11/1/20. Peter had purchased the shares 9 months earlier for $100 per share. Microsoft is selling for $100 per share on 6/1/20. Peter pays Susan $10,000 for writing the put. The stock never falls below $95 per share and the put lapses without being exercised. How do Susan and Peter treat the writing of the put and its later lapse?
2. Same as except the price of Microsoft falls to $85 and Peter exercises the put. Susan agrees to pay Peter $5 per share ($5,000) to settle the put.

Identify if the gain is short term or long term.