Options Income
How to Calculate Realized Options Premium
Realized options premium is the amount of premium an investor keeps after an options trade is closed, expires, or is otherwise completed.
Simple realized premium example
If an investor sells an option for $200 and later buys it back for $60, the realized premium kept is $140 before fees and other adjustments.
What happens when an option expires
When a short option expires worthless, the full collected premium is generally retained as realized option income, subject to brokerage reporting and fees.
What happens when an option is bought back
When a short option is bought back, realized premium is the premium collected minus the cost to close. A higher closing cost reduces the amount retained.
Why rolls are harder to track
Rolling can combine a closing transaction and a new opening transaction. Tracking rolls clearly requires separating realized premium from the prior option and new premium from the replacement option.
Why strategy-level reporting matters
Realized premium is most useful when grouped by covered calls, cash-secured puts, long options, tickers, accounts, and time period.
YieldDock does not provide financial advice. YieldDock is for tracking, organization, reporting, and portfolio visibility only.
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