Options – Trade Input discussion

 

Which Method (#1, or #2) is best for me?

TJS set out to ease the burden (or the complexities) of Tracking & Analyzing Options trades, but that does not mean it’s a one-fit-all approach. Before we can start tracking our Options trades, we need to figure out one of two Methods of trade input.

Personally, I always try to keep things simple and if that’s what you’re after, consider using method #1, but keep reading to understand if the ‘simple‘ method is truly for you.

While I do find that some Options traders use #1, the majority choose #2, as it provides additional (per trade) analysis in the TradingLog sheet; however, the Tracking sheet analysis will be slightly skewed when looking at the Win % and the Payoff Ratio. This is in part to having strategies with more than one leg, where one (or more) legs may be a Win while another leg was a loss. As long as you understand this nuance, the “Expectancy” column will be your best Performance Tracking Category.

Here are some important questions to consider before deciding to commit to either Method of input:

Questions to consider:

1)      Do you need TJS to show you Open and Closed Equity amounts? – Your trading platform may already tell you this.

  • If so, #2 may be for you.

2)      Do you enter Stop and Target Prices? – Which opens up more calculations in the AH -> AK columns.

  • If so, #2 may be for you.

3)      Do you trade Covered Calls?

  • Click link to view an excerpt of why C.C. traders may wish to use #2.

 

If none of these points are relevant, then I’d opt to keep it simple and use #1.