The options P&L cheat sheet

1. Position P&L

2. Fees

• ·One contract usually controls 100 shares. The 100 multiplier is where most tracking errors start.
• ·Count commissions on both the open and the close. A round turn is two separate charges.
• ·Fees reduce a credit and increase a debit. Add them as a cost, never as part of the premium.
• ·Assignment and exercise fees are charged by the broker, not the exchange, and vary by broker.

3. Rolling math

• ·A roll is two orders: close the current position, open the next one. Log both.
• ·Net credit = credit received on the new position − debit paid to close the old one.
• ·Net debit = debit paid to close − credit received on the new position.
• ·Cumulative credit matters more than any single roll. Add the credits, subtract the debits, then subtract every fee along the way.
• ·The new position has its own entry price. Do not carry the old strike or the old premium into it.

4. DTE checklist

1. Days to expiry and the next market holiday, since an expiry can land after one.
2. Distance from the strike to the underlying, in percent and in dollars.
3. Current delta of each short leg, and how far it has moved since entry.
4. Implied volatility rank or percentile, to know whether premium is rich or thin.
5. Earnings and economic events scheduled before expiration.
6. Your own exit rule for this position: profit target, stop level, DTE cutoff.
7. Whether the mark you are reading is live, delayed, or the last known value.