I often think about people who trade options as much as I do for hours on end. I wonder if they use the best discount brokers that area available and above all, just how can they keep records of all their trade?
The point of record keeping in the complex profession of stock broker in my opinion is definitely about it is important there may be. How will you know if you’re successful in trading options in the event you don’t know your profits and losses per stock, per trade type, every day, per month for any whole year? In my opinion the best solution has always been a mixture of 3 methods. The first way of course is always to work with a spreadsheet to help keep a current total of all the stocks I own. I keep another spreadsheet to record my expenses for each and every month, which is vital to understand the grand total of all income sources and expenses including trading fees.
The most important tool I use for many my stock and option trading is Microsoft Access. Utilizing the Access database is the perfect tool for recording each stock or option trade. For options We have 39dexupky column that represents the quantity of contracts for every option trade and then for options one contract represents 100 shares of stock. Basically If I buy and option contract then this contract number could be negative and in case I sell then a contract number will be positive. Another columns in the table would be for the buying price of the choice along with the trade fee, in order to calculate the complete for virtually any option trade will be (100*Price*Contract) – Trade fee. Using SQL (Structured Query Language) has allowed me through the years to showcase essential statistics and reports to let me know how I am doing for virtually any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year has been super easy to perform.
The most crucial point is just how do you really know how you are carrying out if you don’t keep records? You can receive a stock put for you after which market it at loss, but then understand that overall due to option premium you received for selling the PUT which actually you created a profit on that trade overall. Without keeping records, you would never understand how you really did for any specific complex option trade.