I often think of individuals that trade options around I truly do throughout the day. I wonder should they use the best discount brokers that area available and above all, how do they keep records of all their trade?
The purpose of documentation in the complex profession of trading stocks i think is merely about what is important there is. Just how do you determine if you’re successful in trading options if you don’t know your profits and losses per stock, per trade type, each day, a month for any whole year? In my opinion the best solution has long been a mixture of 3 methods. The first method of course would be to work with a spreadsheet to hold a current total of most stocks I own. I keep another spreadsheet to record all of my expenses for every single month, and also this is vital to know the grand total of all the income sources and expenses including trading fees.
The most important tool I use for all my stock and option trading is Microsoft Access. Using the Access database is the perfect tool for recording each stock or option trade. For options I have got 39dexupky column that is representative of the volume of contracts for every single option trade as well as for options one contract represents 100 shares of stock. Should I buy and option contract then a contract number would be negative and when I sell then your contract number would be positive. The other columns from the table could be for the cost of the option along with the trade fee, in order to calculate the total for virtually any option trade can be (100*Price*Contract) – Trade fee. Using SQL (Structured Query Language) has allowed me throughout the years to display very important statistics and reports to inform me the way i am doing for just about any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year is very simple to complete.
The most important point is how will you really know how you are doing should you don’t keep records? You can find a stock put for you then sell it off at loss, but recognize that overall due to option premium you received for selling the PUT that actually you crafted a profit on that trade overall. Without keeping records, you would probably never recognize how you undoubtedly did for just about any specific complex option trade.