A contingent payment right whose value varies inversely with the issuer's stock is a cash settlement put option (section 1234). Applies section 1092 to a holder of both the stock and the right: offsetting positions, straddle loss deferral and holding period rules. A holder of only the right is outside section 1092.
Cites § 1092 (a)(1)(A)×3 (c)(1)×3 (a)×2 (a)(1)(B)×2 (d)(1)×2 (d)(3)(B)(i)(I)×2 (a)(3)(A)×1 (b)×1 (c)(2)(A)×1 (d)(2)×1 (d)(3)(B)(I)×1 (d)(4)(B)×1