Handle your wash sales and generator your Schedule D

Option Assigned happens when short stock options positions opened by an options writer is assigned for fulfillment. The short options positions disappear and the options writer sells the underlying stock if call options were written or buys the underlying stock if put options were written. Assignment can happen randomly for short in the money options before expiration even though assignment is mandatory for short in the money options during options expiration in what is known as an Automatic Assignment. This tutorial shall cover the different options assignment issues that you might face in options trading.

1. Select the specific option record you want to assign.
2. Right-click the record, then select Option Adjustment > Option Assigned as the following menu shows:



3. An Option Assigned dialog box will pop up:
   

Function	Description
1.Transaction Date	The assignment date of the specific option If you want to modify the assignment date of the option, you can manually enter the date or click the Down Arrow then choose from the dropdown calendar.
2. Account	The account name to which the specific option belong. Choose the specific account name from the account list. If you choose All Account, event will apply to all accounts.
3.Security Name	The name of the specific option record
4.Number of Contract	The quantity of the specific option. For example, the number of contract is 10, the shares of the option is 1000.
5.Matched Option ID	The ID of the specific symbol
6.Matched Stock	If the option you want to exercise does have the matched stock, you can choose from the dropdown list , if it hasn’t , it will apply to < auto add stock transaction> generated by TradeMax automatically.
7.Notes	The description of the specific option will be displayed automatically. You can left it blank or enter some important and brief events here .

After checking all the information you entered, press OK button to continue the process or click the CANCEL button to cancel the process.

4. Afer you pressed OK button, the following new record display:



The row outlined in red displays the Assigned Option record.

Notes: In TradeMatch, 207 and 213 represent the ID of the symbol, 0 means the the share of the matched stock after option assigned.

5. You can cancel this action with the Undo Button in the trade tab.

Since all option contracts give the buyer the right to buy or sell a given stock at a set price (the strike price), when an option is exercised someone exercised their rights and you may be forced to buy the stock (the stock is put to you) at the PUT option strike price, or you may be forced to sell the stock (the stock is called away from you) at the CALL option strike price

Make your option exercised, just follow several steps listed below:

1. Select the specific option record you want to exercise .
2. Right-click the record, then select Option Adjustment > Option Exercised as the following menu shows:
3. An Option Exercised dialog box will pop up:
   

   Function	Description
   1.Transaction Date	The exercise date of the specific option If you want to modify the excise date of the option, you can manually enter the date or choose from the dropdown calendar.
   2. Account	The account name to which the specific option belong. Choose the specific account name from the account list. If you choose All Account, event will apply to all accounts.
   3.Security Name	The name of the specific option record
   4. Number of Contract	The quantity of the specific option. For example, the number of contract is 5, the shares of the option is 500.
   5.Matched Option ID	The ID of the specific option record
   6.Matched Stock	If the option you want to exercise does have the matched stock, you can choose from the dropdown list , if it hasn’t , it will apply to < auto add stock transaction> generated by TradeMax automatically.
   7..Notes	The description of the specific option will be displayed automatically You can left it blank or enter some important and brief events here.

   After checking all the information you entered, press OK button to continue the process or click the CANCEL button to cancel the process.

4. Afer you pressed OK button, the following new record display:The row outlined in red displays the the Exercised Option record.Note: In TradeMatch, 207 and 209 represent the ID of the symbol, 0 means the the share of the matched stock after option exercised.
5. You can cancel this action with the Undo Button in the trade tab.

For an option contract , Expiration is the date on which the contract expires. The option holder must elect to exercise the option or allow it to expire worthless.

Typically, option contracts expire according to a pre-determined calendar.

In TradeMax, with Option expired function, you can view or modify your expired options with several clicks.

1. Select the specific option record you want to edit .
2. Right-click the record , then select Option Adjustment > Option Expired as the following menu shows:
3. An Option Expire dialog box will pop up:

After checking all the information you entered, press OK button to continue the process or click the CANCEL button to cancel the process.

4. Afer you pressed OK button, the following new record display:

The row outlined in red displays the Expired Option record.

This Section provides you with detailed instructions on every function within TradeMax.

• Create a New Account file
  
• Setup a New Account
• Enter Previous Year Holding Positions
• Import Trade History
• Adjust Trades
• Add View
• Run Reports
• Print Setup
• File Your Tax

You can add an account to TradeMax to import your trade data. There are five different preset account types in the Account List. You can choose one of them when you are setting up your new account and you can also change it by editing your account function.

To setup a new account:

1. In the left pane of TradeMax main window, right-click My Broker(s) or one of five preset accounts and select the Add New Account
2. A dialog box will pop up as below:

   

   Basic Function
   Broker Name	Select the broker name from its drop down box
   Account Name	Enter a descriptive name for your brokerage account in the Account name: This name can be any name or description that you like such as: “Score Trade Jones “
   Info	Information about the account. Surely you can skip this step by blanking the field
   Notes	Notes about the account. Surely you can skip this step by blanking the field
   Type	Select the exact type of your Brokerage type. Learn more about Types
   Currency	Select the Currency type of this account.
   Default Transaction Fees	1)Preset your security commission in the specific account 2)It will be applied to all transactions input to the account	Type	Security type
   		Fixed	Specific the commission and fee type: 1.Check the checkbox: Fixed 2.Uncheck the checkbox: Percentage
   		Commission	The commission in the trade grid will be sum of the two.
   		Fee

   There are five types:

   • Standard Brokerage account—– General investing account that helps you build and manage a diversified portfolio. Standard Brokerage accounts can be individual, joint, custodial, or business accounts.
   • IRA or Keogh account—- Special accounts that allow saving taxes deferred until money is withdrawn. These plans are subject to frequent changes in law with respect to the deductibility of contributions. Withdrawals of tax-deferred contributions are taxed as income, including the capital gains from such accounts.
   • 529 College Saving Plans—- A tax-advantaged investment program that can be used to fund a child’s higher education at any accredited U.S. post-secondary school. Plans are established by individual states but are typically available nationwide.
   • UGMA/UTMAs— A brokerage account that allows you to invest on behalf of a minor. Funds can be used for any expense the child incurs, not just education. Ultimately, the child assumes ownership of the account, with a portion of withdrawals taxed at their rate.
   • Single Mutual Fund— A account is professionally managed and can be a simplified way to diversify a portfolio.
3. Click OK and TradeMax will show your a new account in the Account List:
   • The FY2008 contains the whole trade data and the baseline positions of 2008 tax year and the trades executed in January of the following tax year
   • The FY2009 contains the whole trade data and the baseline positions of 2009 tax year and the trades executed in January of the following tax year
   • The Baseline contains the baseline position of last finance year
   • The Finance Data contains all cash flow data. For example, cash dividends.
   • The My Holdings contains the holding positions of the specific date
   • The Trade Data contains the important data for the schedule D purposeNote:
     • The FY20xx depends on the year you set up the new account. For example, if you set up your account in 2010 you will get two folders FY2009 and FY 2010 under the new account
     • The positions contains two parts: Open Position (Open Long , Sell to Open) and WashSale Defer Position Learn more about: Long, Sell to Open

TradeMax provides you a powerful way to combine different accounts. For example, it allows you to combine your accounts from different brokers and combine the accounts between you and your relatives only if you setup the accounts in TradeMax.

Let’s take an example to show you how to combine accounts:

You want to combine the account ScoreTrade Jones and SogoTrade Rachel in the Account List.

1. Right-click the item My Broker(s) in the Account List and select the Add View> Custom
   
   
2. A Dialog box pop-up:
   
   
3. Enter the name Jones & Rachel , use the Arrow button between the All account(s) list and the Select Account(s) list to select the combining accounts ScoreTrade Jones and SogoTrade Rachel into the Select Accounts box.
4. Click the OK button and you will get the new combined account Jones & Rachel under the Account List like the following:
   
   

TradeMax also allows you to edit an existing account with the following instruction:

1. Right-click the account you want to edit (for example, ScoreTrade Jones) and select the Edit Account from its context menu:
2. A pop-up window will appears:
3. Edit the information. This box is almost the same as the box in the setup a new account, and you can learn more in the setup a new account.

TradeMax allows you to setup an account, combine accounts and it also allows you to delete a specific account.

1. Right click a specific account ( for example, ScoreTrade Jones) and select Delete Account in the context menu.
   
   
2. pop up the following dialog box
   
   
3. Type in delete to delete the account.
   
   
   Note: Delete an account will delete all data in that account.

To append a trade, please follow these steps:

Step 1: Run TradeMax and go to Account.

Step 2: There are 3 methods to append a trade:

a. Click Append button in Trade tab, then click Trade Append. A dialog box will pop up.

b. Right click on the trade window. A menu will pop up. e.g.: Choose Trade Append>Buy to Open (Open Long)

c. Click the Append button. A dialog box will pop up.

Step 3: The popup dialog box allows you to record the purchase of a security below:

Function	Description
Enter Transaction	Select Transaction Type. There are the following options from its dropdown list : Buy to Open -– Buy Stock/Option to Open a Long position Sell to Close -– Sell Stock/Option to Close a Long position Buy to Close -– Buy Stock/Option to Close a Short position Sell to Open -– Sell Stock/Option to Open a Short position Default value is : Buy to Open
Transaction Date	Select the trade date
Account	Select the account that you are purchasing shares for.
Security Name	Enter the security name manually in the Security Name filed or Select it from the Symbol drpdown list. Additionally, the entering process supports AutoComplete function which pops up a list of suggestions to the user based on the characters entered.
Type	Specify the Type of trade transaction. Available choice is: Stock/Option/Future.
Number Of Shares	For Type of Stock, this field specify the number of shares been traded. For Type of Option, this field specify the hands of options been traded. Normally the value of 1 indicates the option of exercising 100 shares of Stock.
Orig Currency	Original Trade Currency type. There are seven Currency types in the dropdown list: USD, EUR,CAD,AUD,JPY,HKD,GBP If you choose EUR,CAD,AUD,JPY,HKD,GBP as Orig Currency, the dailog box will appear an icon , click this button, the dailogbox will extend.
Base Currency	Domestic currency type or accounting currency type for accounting purposes. Currently IB allows customer to choose different basis currency other than USD.
USD Currency	Settlement currency for tax purposes.
Price (per share)	The transaction price of Stock/Option per share/unit.
Base Price	The share price at Base currency price.
USD Price	The share price at USD Currency price.
Rate	“Rate”related to derivative product like option, future. For instance, an option has a 100 “Rate” which means an option contract is for 100 shares of the underlying stock.
Base Rate	The exchange rate Original Currency/ Base Currency.
Selt Rate	The exchange rate Base Currency / USD Currency. Or directly query the Selt Rate in “Currency Exchange”.
USD Rate	The exchange rate Original Currency/ USD Currency.
Commission	Enter the commission of the shares. If left blank, the commission will be calculated from the value in the Amount column (providing the Amount includes commissions and fees).
Base Commission	Automatically calculate Base Commission by Commission* Base Rate.
USD Commission	Automatically calculate USD Commission by Base Commission* USD Rate.
Amount	The “Amount” will be calculated automatically since you enter the “Number of Shares”, “Price” , and “Commission”.
Base Amount	The “Base Amount” will be calculated automatically since you enter the“Base Rate”.
USD Amount	The “USD Amount“ will be calculated automatically since you enter the“USD Rate”.
Notes	Enter the description of the transaction.
Trade Include In Year	Select the checkbox to activate it and enter the specified tax year.
Deferred cost	If your position is a wash sales defer loss position, just enter your defer cost in Deferred Cost Field. Used to enter the deferloss of this appending transaction.
	Click thebutton to cancel the appending process.
	Click thebutton to enter another new transaction.
	Click thebutton to finish the appending process.
	Click thebutton to get more detailed trade transaction.

Step 4: Enter information of this transaction and press the button to finish the appending process.

Note:

When you input Previous Year Holding Position trade, you must activate Trade Include In Year [2008]. If your baseline is 2007, change the year to 2007.

If your position is a wash sales defer loss position, this is a special option of Open to Long (Open Long) or Sell to Close(Open Short) .

Every year there after, you can use End Of Tax Year function to generate your year-end open positions and defer loss to your next tax year data file.

To display your holding positions in a specific date:

1. Click My Holdings under the Account List
2. A Position box will pop up

   

3. Select your position holding date

   Learn more about: How to select a date

4. Click OK to display the holding positions

   
   
   The positions contains two parts: Open Position and WashSale Defer Position

   Learn more about: Open Long, Open Short