Options trading

I have a client that has had about 150 options trades during the 2018FY. Probably close to a 50/50 mix between Put and Call Options.

This is going to take me ages to process - does anyone have any tips on how to simplify this? Willing to post them all to the one account if that makes any difference. I’ve read the help guide (Exchange Traded Options - Simple Fund 360 Getting Started) however it seems too complicated.

At the moment all of the settlement transactions are in the ‘bank data clearing account’.

Any help is hugely appreciated.

Thanks

Hi Chris, I just had the same, but had a good financial planner managing the trades so he prepared a spreadsheet of all the trades which was used as a source document. In my case, the daily movement (via a bank account) included a margin amount (up/down) which was taken to an account with the Options Clearing House. If this is applicable, you also need to obtain the balance at 30th June of the funds held at the OCH. I was able to keep all the individual (daily) movements (including trades) in the bank data clearing account, remove from the bank data clearing account the Profit as per the planner’s spreadsheet to ‘Profit on options trading’, remove the balance in the OCH account, bring to account any ‘open’ options costs (apparently they settle on the same day so there is only ASX and brokerage fee costs spent at that point, and then I only had a few hundred dollars difference which I adjusted against the profit. The auditor was happy with this as he had all the paperwork - which included each buy/sell trade of the option referenced to the spreadsheet. It certainly was a nightmare. Good luck. Regards, Linda.

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Hi Chris,

I’ve had a few of these in the past as well. I agree in part with the approach taken in the BGL process but I wouldn’t go so far as to keep track of the units. I tend to have the following:

  1. Options Clearing Account (generally in Investments/Derivatives as a Non-Unitised Investment) - where all my option trades start
  2. An “Open Positions as at 30 June” account (generally in current assets) - where any Long (or Purchased) Call and Put positions that are open at 30 June of a particular financial year are reallocated
  3. (Prior to SF360 in SF Desktop I would also have a Capital Gain account to which I would reallocate the Net Balance of the clearing account but not necessary in SF360)

All Option trades start in the clearing account. Trades that were matched out during the year would remain in the clearing account, with any that were Exercised (Longs)/Allocated (Shorts) being reallocated to the Cost Base of the underlying asset. Long Call & Put Positions that are still open at 30 June of a financial year are reallocated to the Open Positions account.

The remaining balance in the clearing account should then be your Capital Gain or Loss for the year. In SF360, I process a disposal of the clearing account for $Nil, which should then reallocate the balance of the clearing account to the 24700 Change in Value of Investments account and report as a single line item in your Investment Reports.

That’s my approach in a nutshell, feel free to reach out if you would like me to assist in more detail.

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Hi Mat,

Just wondering if you do any adjustments for the options that were recorded in year X0; then exercised in year X1 and (according to our amazing legislation) should be recorded as cost base adjustments – not against Options Gains/Losses?

Thanks,
Rosalie