Option Assignments
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Posted by Homer Faidas
on September 13, 2007 at 14:14:47:
Hi Mark
I recently upgraded to the 8.6 version. Unless I have missed it
I still don't see a good way to handle option assignments.
Typically I sell puts. If they expire worthless fine, if not
then I buy (get assigned) stock at the strike price, but my
cost basis is "amount paid-premium received" i.e.
STRIKE-PREMIUM. If I had bought calls that expired in the money
then my cost would be STRIKE+PREMIUM.
Currently I close the option position at zero cost (giving the
false appearance of capital gains), and "buy" the stock at
the Strike price (resulting in higher/lower cost basis).
Suggestion:
Create a new activity category, call it "assignment" purchase
(also an "option" related redemption).
In this you buy X shares at the STRIKE price (resulting in
cash outflow of XxSTRIKE + commission) but at the same time
through a pull down menu you choose an option position to close
(similar to chosing lots to sell). Then the premium received or
paid for these options lowers/raises the cost basis of the
stock purchased (assigned). Similar process when you have a
redemption (stock is called or put away).
Just a thought for a future upgrade. Thanks Homer
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