I often think about individuals that trade options up to I actually do all day long. I wonder when they make use of the best discount brokers that area available and even more importantly, just how can they keep records of all their trade?
The aim of documentation in the complex profession of option trading i think is just about it is important there is certainly. How can you know if you’re successful in trading options should you don’t know your profits and losses per stock, per trade type, every day, monthly to get a whole year? For me personally the answer is definitely a mixture of 3 methods. The initial means of course will be to use a spreadsheet to hold a current total of most stocks I own. I keep another spreadsheet to record my expenses for each month, which is essential to find out the grand total of most income sources and expenses including trading fees.
The most important tool I prefer for those my stock and option trading is Microsoft Access. While using Access database is an ideal tool for recording each stock or option trade. For options I actually have 39dexupky column that is representative of the number of contracts for each option trade and also for options one contract represents 100 shares of stock. Should I buy and option contract then this contract number can be negative of course, if I sell then the contract number would be positive. The other columns inside the table can be for the buying price of the choice and the trade fee, in order to calculate the entire for any option trade could be (100*Price*Contract) – Trade fee. Using SQL (Structured Query Language) has allowed me over time to present crucial statistics and reports to let me know how I am doing for any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year has been very easy to perform.
The main point is how will you fully realize how you are doing should you don’t keep records? You can find a stock put to you personally and then market it at loss, however realize that overall as a result of option premium you received for selling the PUT that really you crafted a profit on that trade overall. Without keeping records, you would probably never know how you really did for virtually any specific complex option trade.