Ordinary treatment cuts both ways. Gains are taxed at full marginal rates with no 60/40 benefit, but losses are ordinary too, so they are not trapped by the capital-loss-limitation and can offset other income.
Traders in major currency pairs may elect out of Section 988 into section-1256 treatment for qualifying forward and futures contracts, with the election made internally and contemporaneously rather than filed. Retail spot contracts at a forex dealer often do not qualify, and the analysis is genuinely technical.
The section also catches currency movement on foreign-denominated bank accounts, receivables and debt, which is why a trader with overseas accounts can have taxable currency gains without making any trade.
This is general information for the United States, not tax advice. Rules change and depend on your circumstances; take professional advice before electing.
Related: section-1256, sixty-forty-tax-treatment, capital-loss-limitation, major-pairs, carry-trade