# What is a Section 1256 ETF?

> As of Aug 31, 2026, 73 income ETFs write options on an index, which are Section 1256 contracts, out of 353 whose options ETFIQ has read.

Data as of Aug 31, 2026. Rebuilt every trading night.

## What is a Section 1256 ETF?

Data as of Aug 31, 2026. Rebuilt every trading night.

As of Aug 31, 2026, 73 income ETFs write options on an index, which are Section 1256 contracts, out of 353 whose options ETFIQ has read.

### In plain words

A Section 1256 contract is a tax category for certain options and futures, including options on a broad stock index such as the S&P 500. The fund marks it to market at year end and treats the gain or loss as 60% long term and 40% short term.

Options on a single stock or an ETF share do not get this treatment. ETFIQ reads each income fund’s latest N-PORT: of 353 funds read, 73 write index options, 105 write on single stocks and 93 on ETFs. This is a fact about the fund, not tax advice, and ETFIQ links the IRS form to check it.

### Questions

Does a Section 1256 fund pay less tax? The fund’s tax character can differ. That is not advice about your tax. Ask a tax professional.

How does ETFIQ know which options a fund writes? From the fund’s latest N-PORT holdings, which list each option and its underlying.

Where do I see this for a fund? On the tax block of every income fund page, with the filing date.

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: ETFIQ, What is a Section 1256 ETF?, data as of Aug 31, 2026. https://etfiq.com/learn/what-is-a-section-1256-etf
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
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