How to compute current value of the portfolio?

A lot of you have asked about how I intend to compute value of the portfolio at any given time. I will use a very simple method to determine that.

Let me explain:

At any point of time, the portfolio has some free cash and a list of currently open trades. The value of the free cash stays the same for determination :). Now, each trade is of the following nature:

1. Buy XYZ stock
2. Sell equivalent number of calls on XYZ stock.

The value of this trade would be the cost incurred to close it (at the current time) Closing this trade would mean:

1. Selling XYZ stock
2. Buying an equivalent number of calls for XYZ stock
   

As usual, I will consider conservative points of the bid-ask spreads for both of these legs. In reality, a better price point may be reached by appropriately placing limits on the orders.

Does this sound good? Do you have any better ideas to measure the value? I would love to hear from you. Please either leave a comment or send me an email in case you have any further suggestions.