Dealing with Options PUTS & CALLS

CALL XXX Sep 17.5 is very much a different security than CALL XXX Sep

18 or CALL XXX Dec 17.5 and each has it's own trading symbol.

Why would you expect them to be listed as the same security?

Hi Danbrown,

I might be too much of a novice to Q2006 or options to understand the proper workings. I guess what I mean is for CALL and/or PUT, take AIG-Americ.Int.Grp (AIG) as an example. You buy 500 shares of AIG in August. In September you pick up 100 CALL AIG NOV 35 and settle in November.

Rather than recording the CALL as a separate stock by itself with only the ShtSell and CvrShrt transactions. I would think, maybe wrongly, it would make sense to record the two entries within the named stock (AIG) I own with the memo field noted of the CALL info. If I continue to buy a Dec, Jan and Feb Call of the same stock, I would end up with 5 different stocks listed. Rather than one stock with 11 transactions recorded (the buy,5 ShtSell & 5 CvrShrt).

I guess I'm assuming Q2006 can do the math for ShtSell & CvrShrt to track base cost.

Steve

I just looked up AIG options.

The symbols for the November CALL with a strike price of $50 is AIGKJ. The put at that price is AIGWJ.

The Call at $55 is AIGKK and the put is AIGWK.

These 4 options have different characteristics, but the same expiration date. They ALSO have different prices. They closed today at $16.50, $0.05, $11.50 and $0.05 respectively.

WHY ON EARTH would you want to track them as a single security?

Dan

This is the second time your scenario makes no sense to me. What does short selling and covering have to do with purchasing calls?

Each series is its own security for tax purposes. Jan 35c, Jan

40c, Jan 30p, Feb 30c, etc. And each one has its own market characteristics.

I simply enter the transaction, ignoring the contract parameter and instead using the only thing Quicken understands, share count, and then treat the option series like any other security. But then I don't download info from my brokerage. Maybe doing so creates a "contract" problem.

Paul

When I download from my brokerage, a Call or a Put come into Q2006 as a new stock. I don't know what the proper way they should be entered or titled. I only used AIG as an example. Buying four Calls over four month. So if I understand you correctly, I should be entering them in as four different stocks? But then, how do you manage the overall history of the example AIG stocks and options to see gains & losses?

Steve

P.S. Thanks in advance for you comments!

I think that I can shed some light on this subject.

If you are merely trading puts and calls, enter them as individual securities, not linked in anyway to the underlying security. Quicken will not get their quotes even though you might have the correct symbol for the put or call. Quicken's data-feed for quotes doesn't have options.

If you are selling a covered call against a stock you already own, enter it as a "short sale" and then "cover short sale" when you either buy it back or it expires. Again, I don't try to link options and their underlying stock.

It has been my experience trading options for more than 25 years and using Quicken in various iterations for the past 10 years that Quicken is basically brain-dead when it comes to trading options. To further complicate matters, I have found that downloading from my broker, Merrill Lynch, is less than stellar too. I do everything manually which, for me, if much easier than downloading and adjusting.

Just one man's opinion.