Option trading and record keeping

I often think of other people trading options as much as I do throughout the day. I wonder if they use the best discount brokers available in that area and more importantly, how do they keep records of all their trades?

In my opinion, the goal of keeping records in the complex profession of options trading is the most important thing there is. How can you tell if you are successful in trading options if you don’t know your earnings and losses per share, by trade type, per day, per month for an entire year? For me the answer has always been a combination of 3 methods. The first method, of course, would be to use a spreadsheet to keep a current total of all the stocks I own. I keep another spreadsheet to record all my expenses for each month, and this is vital for knowing the grand total of all sources of income and expenses, including business rates.

The most important tool I use for all my stock and option trading is Microsoft Access. Using the Access database is the perfect tool to record every stock or option trade. For options, I have a column that represents the number of contracts for each option trade and for options, one contract represents 100 shares. If I buy and option contract, the contract number would be negative and if I sell, the contract number would be positive. The other columns in the table would be for the option price and the trade fee, so calculating the total of any option trade would be (100 * Price * Contract) – Trade fee. Using SQL (structured query language) has allowed me over the years to show very important statistics and reports that let me know how I am doing with any type or strategy of stock or option trading and summarize the performance per share. , option, month, day or year. it has been very easy to achieve.

The most important point is how can you really know how you are if you don’t keep records? They might put a stock on you and then sell it at a loss, but then know that overall because of the option premium you received for selling the PUT, you actually made a profit on that trade overall. Without keeping records, you would never know how you really fared for any specific complex options trade.

With any profession, record keeping is vital to knowing how you are really doing, but with the difficult profession of options trading, record keeping is the most important thing you can do.