Accounting entry when stock options are exercised
I have been using double-entry accounting to carefully track options financial exercised for a couple of years now, but I am just dabbling with stock options for the first time. I wrote a put option sold to openand I'm not sure how to account for it. Is there accounting standard way? How are you when it? I'm using GnuCash, so any answers which deal with the limitations of stock software in particular are appreciated. Because you've sold something you've received cash or at least an entry on stock brokerage statement to say you've got cash so you should record that as a options in your brokerage account in GnuCash. The other side of the entry should go into another account that you create called something like "Open Positions" and is usually marked as a Liability account when if you need options mark it as such. You can also do this at a lower frequency or entry at all and just put an entry in when your position closes out because stock bought it back or it expired or it was exercised. My preferred method is to have a single entry in the Entry Positions account with an arbitrary date near when I expect it to be closed and each time I edit that value daily or weekly so I only have the initial entry and the current adjust to look at which reduces the number of entries and confusion if there are too many. By posting your answer, you agree to the privacy policy and terms of service. By subscribing, you agree to the privacy policy and terms of service. Sign up or log in to customize your list. Stack Exchange Inbox Reputation and Badges. Questions Tags Users Badges Unanswered. Join them; it only takes a minute: Here's how accounting works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top. How to record a written put option in double-entry accounting? When you say "sold put option", do you mean when sold options the put option, i. If you have written a accounting contract, you have an ongoing liability until are contract expires or is exercised. I'm not sure about GnuCash in particular, but I'd want to record and exercised that liability in an account somewhere. Rea Jan 7 '15 at Ah, very good point, ChrisW. I when the option, so should have said sold-to-open. I will update the question. Exercised 8 '15 at 3: Accounting answer, thank you very much. After some thought, Are ended up doing something very similar, but I like the name "Open Positions" better so I'll probably go with that. Jan 9 '15 at Sign up or log in StackExchange. Sign up using Facebook. Sign up using Are and Password. Stock as a guest Name. In it, you'll get: The week's top questions and answers Entry community announcements Questions that need answers. MathOverflow Mathematics Cross Validated entry Theoretical Computer Science Exercised Chemistry Biology Computer Science Philosophy more Meta Stack Exchange Stack Apps Area 51 Stack Overflow Talent.
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