Re: Option Assignments

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Posted by Mark on September 13, 2007 at 14:22:00:

In Reply to: Option Assignments 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

Hi Homer,

Thanks for the feedback. We do have documentation on how we recommend tracking options. Please see:

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

Thanks,
Mark
--
Fund Manager - Portfolio Management Software

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