Traders' income for pension purposes

[Guest IntPenDes]

I am currently preparing a Private Letter Ruling regarding income of a trader of options, futures and other short term stock gains as being viable compensation for pension purposes. Any information that you have to that effect would be greatly appreciated.

[Gary Lesser]

Does the trader file a Schedule C or receive W-2 income? Could the trader perform his service for more than one company or does he operate his/her own trade or business for profit? If the trader is operating a trade or business and is not an employee of some other entity it would appear that he/she has earned income under IRC 401©. Why do you think that the individual doesn't qualify for a SEP/QP?

[imchipbrown]

This doesn't sound, on the face of it, as "Earned Income".