Am I really making money? Enter the balances from your monthly brokerage statements in this spreadsheet and it will calculate everything for you in an industry standard format.
The report format is based on a report provided by Morningstar. Morningstar provided the formulas for all of the calculations as well as sample data so that this spreadsheet could be compared against the Morningstar calculations at their website. When your monthly information is entered, your account performance will be calculated just as if Morningstar was reporting the results of your personal hedge fund. You can compare your performance directly against mutual funds, hedge funds and ETFs.
My trading style requires that I hold a high percentage of cash. It's just too much cash to let it just sit there. I really don't want to take price risk of bond funds. I really don't want to get stuck with the low rates and long time committments in a bond ladder. I am not happy with the risks of corporate "junk" bonds either.
I use a trade which I call a Synthetic Bond. Technically speaking, these may be Forward Conversion Arbitrage positions. A combination of long stock, a long ATM put and short OTM call in the two year LEAPS does the trick.
What does it cost to get into the trade, and just as importantly, get out of the trade? Enter your broker's commission charges here and see if that Iron Condor is really worth the round trip.
Options investing is extremely complex and I am not so quick with the math so I use a lot of spreadsheets help me make decisions regarding option trading. I belong to several options trading groups where we share our strategies. I am happy to do so. But, I am not a broker/dealer, CFP, RIA or a licensed advisor of any kind. I cannot give you advice. I have nothing to sell you. Investing is risky. You could lose all of your money. I am not giving advice; I am only telling you what I do. I could be wrong. If you do the things that I do, you could make some of the dumb trades that I have made. Consider what you do carefully; you’re on your own. So, please don’t sue me.
How much risk am I taking in my portfolio? How do I even measure risk?
I need to be able to measure how much risk I am taking first. Then I can create hedge trades with options to reduce potential losses in the portfolio.
How can something that seems so simple be so complicated? There are correct ways to calculate investment returns and ways that may be misleading. It is important to know what is being reported.
Bullish spreads; in this 2017 and 2018 market that only seems to go up, these trades have worked well. It is far more than a "set it and forget it" trade however. This spreadsheet provides guidance on setting up and managing these rather complicated trades.
The spreadsheet depends on the use of TD Ameritrade's Thinkorswim (TOS) and a Windows environment running RTD with Excel.