Beta fund buys a call option for 100 shares of ABC stock on January 5, 2016. Beta fund buys a put option for 100 shares of ABC stock on January 6, 2016. The fund sells the call option on December 31, 2016 for a loss of $11.00. On December 31st, the put option shows an unrealized gain of $5.00.
Identify the type of financial transaction and explain the tax ramifications.