Monday, December 22, 2008

Structure of an opening trade

For all opening trades i.e. (buy stocks and write calls), the following information will be posted.

Quick Summary view

Stock Leg (Buy)
  • Stock ticker
  • Company name
  • Number of shares bought
  • Price per share
  • Total money spent
Option Leg (Sell)
  • Call Symbol
  • Strike date
  • Strike price
  • Number of calls sold
  • Total call premium received
Transaction
  • Total money out
  • Initial Investment
Returns if call gets exercised
  • Absolute returns
  • Percentage returns
  • Annual percentage returns (Normalized returns over 365 days)
Break Even Information
  • Break-even point (Below which the position loses money)
  • Break-even buffer (in terms of percentage of current stock price)

All of the prices will adhere to conservative view in terms of bid-ask spread. This means that a "buy" transaction will be recorded at "ask price" and a "sell" transaction will always be recorded at "bid price". In reality, an investor can do better than this by appropriately placing limit orders.

If you like any other fields to be added to this, please leave a comment.

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