I often consider other people who trade options just as much as I actually do all day long. I wonder once they take advantage of the best discount brokers that area available and most importantly, just how do they keep records of their trade?
The aim of documentation in the complex profession of option trading in my opinion is definitely about what is important there is certainly. Just how do 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 for any whole year? In my opinion the perfect solution has long been a variety of 3 methods. The very first approach to course would be to make use of a spreadsheet to hold a current total of all stocks I own. I keep another spreadsheet to record all of my expenses for every month, which is essential to know the grand total of all the income sources and expenses including trading fees.
The most important tool I personally use for many my stock and option trading is Microsoft Access. Using the Access database is the ideal tool for recording each stock or option trade. For options We have 39dexupky column that is representative of the number of contracts for each option trade and then for options one contract represents 100 shares of stock. Should I buy and option contract then a contract number could be negative and in case I sell then the contract number could be positive. The other columns inside the table will be for the cost of the choice as well as the trade fee, to calculate the total for virtually any option trade will be (100*Price*Contract) – Trade fee. Using SQL (Structured Query Language) has allowed me through the years to display essential statistics and reports to tell me the way i am doing for almost any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year has become very simple to perform.
The most important point is how can you truly know how you are doing in the event you don’t keep records? You may get a stock put to you personally and then sell it at loss, however know 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 might never learn how you really did for just about any specific complex option trade.