I often think about individuals that trade options up to I actually do for hours on end. I wonder when they take advantage of the best discount brokers that area available and more importantly, how do they keep records of their trade?
The aim of record keeping from the complex profession of option trading for me is definitely about the most important thing there is certainly. How could you know if you’re successful in trading options when you don’t know your profits and losses per stock, per trade type, daily, each month for the whole year? For me personally the solution happens to be a mix of 3 methods. The 1st means of course would be to make use of a spreadsheet to hold a current total of all the stocks I own. I keep another spreadsheet to record all my expenses for each month, and also this is important to know the grand total of most income sources and expenses including trading fees.
The most significant tool I prefer for all those my stock and option trading is Microsoft Access. Making use of the Access database is the ideal tool for recording each stock or option trade. For options We have 39dexupky column that represents the quantity of contracts for each option trade and also for options one contract represents 100 shares of stock. Generally If I buy and option contract then a contract number will be negative and in case I sell then a contract number could be positive. The other columns from the table would be for the price tag on an opportunity and the trade fee, so to calculate the complete for almost any option trade could be (100*Price*Contract) – Trade fee. Using SQL (Structured Query Language) has allowed me over the years to present very important statistics and reports to let me know how I am doing for virtually any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year is very easy to accomplish.
The most crucial point is how could you truly know how you are carrying out in the event you don’t keep records? You can find a stock put for your needs and after that sell it off at loss, however know that overall due to the 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 understand how you truly did for virtually any specific complex option trade.