OPTIONS & DIVIDENDS

[Corelio]

I have a couple of questions regarding options and dividends.
1) If ones sells a covered call, I would like to see the cost basis of the stock to be reduced. I don't see that as possible since the call premium is added to the cash account only. There should be some sort of command to link the option to a related stock and allow for adjustment of cost basis.

2) Dividends that are NOT reinvested do net get automatically credited to the cash account. One has to manually enter the purchase in the cash account from dividend received. There should be a way for the cash account to automatically purchase shares once dividend is received if not reinvested.

Thanks

[Mark]

Hi Corelio,

1) Thanks for the feedback/idea. Our recommended methodologies for handling options are shown here:

http://www.fundmanagersoftware.com/options.html

However, if you'd like to have the sell of a covered call reduce the basis of the stock, you can record this as a "Return of Capital" distribution. This will have the effect of reducing the cost basis.

2) You must assign a "default cash account" for your sub-portfolio. You do this in the "Properties..." dialog for any sub-portfolio. Once you have a default cash account assigned, any non-reinvested distributions will automatically be deposited into this cash account.