Options Income in Portfolio Performance

[rrossME]

Hello,

I recently started using Fund Manager and am having trouble factoring my option income into the %gain in the portfolio performance report.

I followed the instructions listed for selling puts and calls, and the income associated with each trade is being automatically added to the default cash account. However, when I pull up the portfolio performance report, the income is not being included in the "%gain", and is thus not being included in my overall return.

I'm just wondering how I can make sure the income I'm generating from my option selling strategy is being factored into my overall return. I attached an image of what the portfolio performance screen looks like, if that helps.

Any help would be truly appreciated.

Thanks,

Robert

[Mark]

Hi Robert,

Can you give me a specific example? What transactions do you have recorded, and what do you see in the Portfolio Performance report? If you want to just reference a certain line in your screen shot that is fine, but I'd also need to know what you have recorded for transactions within that period.

[rrossME]

Sure.

For example, let's use the HII June 2016 call, $150. This is a closed covered call trade where I sold the option for $2.75 and generated $275 in income via the premium. I set this up so that the $275 was deposited in the cash account (i.e. entered New Investment --> sold 100 options [-100 shares] at $2.75 for the share price).

This caused the default cash position to increase by $275.

When the option expired worthless on June 17th, I recorded a purchase of 100 shares at a price of $0 per share.

What I'm wondering is how I get this $275 to be reflected in the %gain column in the portfolio performance (or if it is being included and I'm interpreting the data incorrectly).

I thought that this $275 wasn't being included since both the "CASH" row has a "NA" under "%gain" and because the "HII June 2016 call, $150" row also has "NA" under "%gain", though the "Gain" column has $275.

[Mark]

Hi Robert,

The income you earned from this option is included in your portfolio level figures. The %Gain and Yield cannot be calculated for this situation, as your cost basis is negative. You can see the equation for %Gain here:

https://www.fundmanagersoftware.com/hel ... n_oop.html

and for the Yield (ROI), see this documentation:

https://www.fundmanagersoftware.com/hel ... s_roi.html

Even though they aren't listed on the line item for the specific option, these effects are still included in your sub-portfolio figures.