I have been using double-entry accounting to carefully track my financial situation 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 open , and I'm not sure how to account for it.

stocks - How to record a written put option in double-entry accounting? - Personal Finance & Money Stack Exchange

Is there a standard way? How are you doing it? I'm using GnuCash, so any answers which deal with the limitations of that software in particular are appreciated. Because you've sold something you've received cash or at least an entry on your brokerage statement to say you've got cash so you should record that as a credit 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 type if you need to mark it as such. You can also do this at a lower frequency or not at all and just put an entry in when your position closes out because you bought it back or it expired or it was exercised. My preferred method is to have a single entry in the Open 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.

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Managing Risk with Options Strategies: Long and Short Call and Put Positions

Questions Tags Users Badges Unanswered. Join them; it only takes a minute: Here's how it 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 you sold short the put option, i. If you have written a new contract, you have an ongoing liability until the contract expires or is exercised.

I'm not sure about GnuCash in particular, but I'd want to record and manage that liability in an account somewhere. Rea Jan 7 '15 at Ah, very good point, ChrisW. I wrote the option, so should have said sold-to-open.

I will update the question. Jan 8 '15 at 3: Great answer, thank you very much.

After some thought, I 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.

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