How to Handle Buying Puts
The tracking of purchased
puts is straight forward. Create a new investment for the
puts and record the purchase just as you would for a
stock.
There are three
possibilities on how the position will get closed:
- If the put expires,
record a sell in this investment at a price of $0/share
to close the position.
- If you decide to sell
the put, just record the sell at the price you
received for the put. This is identical to how
you would track a stock.
- If you exercise the put, record a sell in the put investment at
$0/share, as well as a sell in the underlying stock's investment at
the option price. If you also bought the underlying stock at
market value in order to put it, record that as well in the
underlying stock's investment.
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