Options Transaction

Q&A
1

Dear Evan

Hope you are keeping well in Japan.

I have one question about tracking options. Recently I want to try tracking my options in Stockacafe but I am hit by this issue listed below.

If I input my “sell put” into the option transactions, system will multiply premium * fee and give me a total cash value. However, for sell put option, my maximum loss will be the maximum amount I have to incur from buying 100 shares minus my premium collected. So shouldn’t it be 7200 (total cost of buying 100 shares) -minus 305 (my collected premium) if excluding fees?

If its premium * fee, the cash amount is grossly inflated because even if the underlying assumption is i will buy the stock , it will be 72*100 shares. and my PL is totally inaccurate.

thank you and looking forward to your reply.

Regards
April Xu

2

Hi April,

Thank you for reaching out!

I have returned to Singapore for a few years although I am still Japanese PR and might go back and stay again :slight_smile:

Hmm… I think the definition of terminologies we are using here are different and causing the confusion.

For SELL PUT, Total = (Premium x Lots x 100) - Fees.

  1. Total means total amount received.
  2. Premium means premium received per share.
  3. Lots means number of lots sold. And we assume 100 shares per lots (which is not always true in HK market)
  4. Fees mean transacitons fees.
3

Dear Evan

Wherever you stay in future, all the best to you & family!

Thank you for explaining. I have understood and now keyed in my options correctly. I did indeed get confused by the terminology. I’ll continue to key in and see if the tracking is accurate. If not, I get back to you again.

Take care.

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