stock |Form 8949 Capital Gain & Wash Sales calculator software

Does TradeMax support option assigned/exercised cost calculation?

Does TradeMax support option assigned/exercised cost calculation?

Q:Does TradeMax support option assigned/exercised cost calculation?

A:We can ensure you our software handles it. If option is assigned or exercised, our software will automatically adjust the cost. The option which is assigned or exercised will not trigger any immediate realized gain or loss on our report. However, when TradeMax generate report, your relevant option/stock position will carry deferred option cost. This is a very important feature of TradeMax!

But TradeMax don’t associate any irrelevant option and stock position. 2 conditions need to be met:

  1. The strike price, qty of option with stock exercised/assigned price.
  2. Occurred at same time.

We have attached a screenshot from our demo account which shows an option assigned to stock position.

From all the broker reports we have seen from our customers, we have not seen any broker finish their gain and loss report flawless, especially if the customer has merge events and options assigned, expired and/or exercised.

However, we found a problem, and this problem arises from the stock transactions where either our purchase resulting from the exercise of Put Options we had sold, or in assigning the shares to us at the strike price of the option, or by our sales resulting from the exercise of Call Options we had sold, or by taking an assignment from us at the strike price shares subject to the exercise of the Call Option. So far, we have not run into stock with options exercised on both the purchase and sale; but that may well have happened.

Daily Account Value

Daily Account Value

TradeMax provides you with a simple way to track your trade data on daily basis, with the Daily Account Value function, you can easily compare and monitor your trade performance through the generated chart so as to make a better investment strategy and maximize your capital gains.

The following step-to-step wizard will show you how to generate the chart you wanted based on the imported data and the downloaded holding security prices of specific securities.

Note: You should download the security prices of the selected stocks in a fixed time period before you generate the chart.(For example, you want to generate a chart based on the trade data on Finace Year 2006, then you should set the time period within 2006).

  1. After you download the price of the security in a set time range, select the specific finance year (.i.e. FY2006) under the selected account,then click Trade Data& Report < Add Report < Daily Account Value.
  2. The Daily Account Value option will automatically add to the sub-menu under Trade Data & Report.
  3. Click Daily Account Value tab to run the chart or set the parameters of the charts.
  4. A Edit view dailog box pops up as below:
  5. Basic Function
    Wactch List
    The title of the list
    Select the column header from the dropdown list by click the specific option under Type, then click Button to add this option.
    Button Select the specific column header under Type, then click Button to hide it, the chart will not display this option.
    The different types of column headers in this column
    Symbol The trading currency of the symbol
    Color The user can set color to indicate the line of specific colomn header in the chart.
    Day Set the day for moving average value, you can set Five day, Seven day, etc, the five-day or seven-day average value will be auto-calculated.
    Portfolio Value Portfolio Value is got by multipying Market Value and the shares of securities . TradeMax support settling by different currencies such as USD, HKD, CAD, GBP,etc, different currency means different value.
    Cash Balance The cash balance means the cash you are holding after you buy and sell the security. As you trade securtiy in different currency, if you select USD as your trading currency, TradeMax will show the USD cash balance. as for other currency, different currency means different cash balance.
    Account Value Account Value equals Portfolio Value + Cash value
    Moving Avg The average value of securities calculated on five-day or seven-day basis
    Buy&Sell Amount The transaction number of times on daily basis
    Buy&Sell Amount Total The total trade amount you buy and sell on daily basis
    Trends Comparison
    The comparison between your securities’ index and other index (i.e Dow Jones), the comparison can display your trade performance to see if your index is above or below other index.
    Y Axis min value
    1. Apply 0 to Y Axis as min value(default)2. Use default min value as Y Axis min value
    Summary Info
    TradeMax will show users the total trading quantities, total and average profit/loss , total average net gains and total commissions within a set time period, maximal drawdown and percentage,so the users who bother to view the charts can also find the summary information of your trade performance here.
  6. After selecting the specific column header you wanted to show(i.e Account Value, Portfolio Value, Cash Balance, Trends Comparison) in the chart, the chart will show as below:
  7. Basic Function
    1.Column Header
    the selected column header you wanted to display in the chart
    2.Account Value The line of Daily Account Market Value
    3.The line of Comparison Trend
    The line of ^DJI index compare with account value
    4.Portfolio Value
    The line of Daily Portfolio Value
    5.Cash Balance
    The line of Daily Cash Balance
    6.Tip Box
    When your mouse move to some point of the line, a small notification window will show to tell you the basic information of the trades on that day.
    7.Left Y Axis Left Y Axis indicates the trade total value based on the unit : thousand
    8.X Axis X Axis indicates the specifc date
    9.Right Y Axis Right Y Axis indicates the percentage of the total value
    Statistics Information
    Daily Account Value Statistics
    • From 2009-01-01 to 2009-12-312009-1-1 is report Start Date,2009-12-31 is report End Date
    • Start Date Account Market Value 100,000.00End Date Account Market Value 162,148.00(62.15%)

      Daily Account market value (include securities & cash Value)

      In this case, End Date market value(162,148.00) increased by 62.15% than Start Date
      market value(100,000.00)

    • Maximal Drawdown 24,735.00(17.16%) It is defined as the biggest drop of a given asset within a certain time period. In this case, The biggest drop for 24,735.00(17.16%)

      Max 144,104.00[2009-04-16], Min 119,369.00[2009-06-30]

      The biggest drop from the highest 144,104.00[2009-04-16] down to the lowest 119,369.00[2009-06-30]
      (Marked by the triangle in the chart)

    Realized Gain&Loss Statistics
    • Realized 6 Total trades. 4 wins/2 losses. Total commission: 81.67In this case, Realized Gain&Loss has 6 total transactions. 4 Wins and 2 losses. Total commission is 81.67
    • Realized Total profit 21,726.33, Realized Total loss 2,133.00, Realized Net profit 19,593.33Realized Net profit = Realized Total profit – Realized Total loss
    • Average profit per trade 5,431.58, Average loss per trade 1,066.50, Average net profit per trade 3,265.56 

      Average loss per trade 1,066.50 = Realized Total loss 2,133.00 / 2 losses

      Average net profit per trade 3,265.56 = Realized Net profit 19,593.33 / 6 Total trades

      Average profit per trade
      5,431.58 = Realized Total profit 21,726.33 / 4 wins

    Mark to Market Gain&Loss Statistics
    • MTM 10 Total trades. 8 wins/2 losses. Total commission: 105.00 In this case, Mark to Market Gain&Loss has 10 total transactions. 8 Wins and 2 losses. Total commission is 105.00
    • MTM Total profit 64,281.00, MTM Total loss 2,133.00, MTM Net profit 62,148.00MTM Net profit = MTM Total profit – MTM Total loss
    • Average profit per trade 8,035.13, Average loss per trade 1,066.50, Average net profit per trade 6,214.80 

      Average loss per trade 1,066.50 = MTM Total loss 2,133.00 / 2 losses

      Average net profit per trade 6,214.80 = MTM Net profit 62,148.00 / 10 Total trades

      Average profit per trade
      8,035.13 = MTM Total profit 64,281.00 / 8 wins

    Total Sales
    • Short Term Total SalesTotal sales amount if the Assets hold one year or less
    • Long Term Total SalesTotal sales amount if the Assets hold more than one year
    • Short Open Position Total SalesTotal sales amount if the Investors have sold short but not yet covered or closed
    • 1099 Gross Sales (added broker fees to cost basis)1099 Gross Sales = Short Term Total Sales + Long Term Total Sales + Short Open Position Total Sales

      Gross proceeds less commissions (did not add broker fees to cost basis) = 1099 Gross Sales – Realized Total Sales commission

Adjust Options

TradeMax provides you with a powerful function to adjust your options .

  • Option Assigned 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.
  • Option ExercisedSince 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
  • Option Expired 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, and become worthless..

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

Note: You should select the specific option record first ,right click the mouse, the Option Adjustment option will appear in the list.

Wash Sale

A wash sale occurs when you sell a security at a loss but then repurchase it within 30 days at the low price.The subsequent purchase could occur before or after the security is sold, creating a 61-day window that must be monitored to identify wash sales.

IRS Explanation of Wash Sales

Wash Sale Example

How to determine Substantially Identical?

What the Wash Sale Rule Really Means to Investors


IRS Explanation of Wash Sales

wash sale occurs when you sell or otherwise dispose of stock or securities (including a contract or option to acquire or sell stock or securities) at a loss and, within 30 days before or after the sale or disposition, you:

  • Buy substantially identical stock or securities,
  • Acquire substantially identical stock or securities in a fully taxable trade,
  • Enter into a contract or option to acquire substantially identical stock or securities, or
  • Acquire substantially identical stock or securities for your individual retirement arrangement (IRA) or Roth IRA.

You cannot deduct losses from wash sales unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities. The basis of the substantially identical property (or contract or option to acquire such property) is its cost increased by the disallowed loss (except in the case of (4) above). For more details on wash sales, see Pub. 550.

Report a wash sale transaction on line 1 or 8. Enter the full amount of the (loss) in column (f). Directly below the line on which you reported the loss, enter “Wash Sale” in column (a), and enter as a positive amount in column (f) the amount of the loss not allowed.


Wash Sale Example

Example 1.

You buy 100 shares of XYZ for $1,000. You sell these shares for $750 and within 30 days from the sale you buy 100 shares of the same stock for $800. Because you bought substantially identical stock, you cannot deduct your loss of $250 on the sale. However, you add the disallowed loss of $250 to the cost of the new stock, $800, to obtain your basis in the new stock, which is $1,050.


Example 2.

You are an employee of a corporation that has an incentive pay plan. Under this plan, you are given 10 shares of the corporation’s stock as a bonus award. You include the fair market value of the stock in your gross income as additional pay. You later sell these shares at a loss. If you receive another bonus award of substantially identical stock within 30 days of the sale, you cannot deduct your loss on the sale.


How to determine Subtantially Identical?


when determining whether stock or securities are substantially identical, you must consider all the facts and circumstances in your particular case. Ordinarily, stocks or securities of one corporation are not considered substantially identical to stocks or securities of another corporation. However, they may be substantially identical in some cases. For example, in a reorganization, the stocks and securities of the predecessor and successor corporations may be substantially identical.

Similarly, bonds or preferred stock of a corporation are not ordinarily considered substantially identical to the common stock of the same corporation. However, where the bonds or preferred stock are convertible into common stock of the same corporation, the relative values, price changes, and other circumstances may make these bonds or preferred stock and the common stock substantially identical. For example, preferred stock is substantially identical to the common stock if the preferred stock:

  • Is convertible into common stock,
  • Has the same voting rights as the common stock,
  • Is subject to the same dividend restrictions,
  • Trades at prices that do not vary significantly from the conversion ratio, and
  • Is unrestricted as to convertibility.


What the Wash Sale Rule Really Means to Investors


If you are an active trader in a particular stock, it is very necessary for you to track your trades and monitor your wash sales period before you re-purchase the same stock. If you suffered a loss, and you need to pay attention to the date you repurchase the substantially identical secuirty and still claim the earlier loss on taxes.

Manually tracking and figuring out the wash sale is really a time-consuming job for investors, but using a produce such as TradeMax can help manage your wash sale well, and avoid re-buying the same stock in wash-sale period.

While you will eventually realize losses deferred by wash sales, avoiding them in the first place will help you maximize your investment performance.

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