Calculation of cost basis for options trades
I recently opened a covered-call position against my Tesla stock, selling one Dec. 24th contract at $52.00 per share. When I downloaded the transaction from Vanguard, it initially appeared as 1 share at $5200, representing the single contract, which recast as 100 shares at $52. So far so good.
But here's the interesting part: the original download showed a cost basis of -$1.92, which seemed strange as it didn't relate to anything else. Even worse, though, when I recast the transaction, it multiplied by 100, both per share and overall, giving me a supposed cost basis of -$192.31 PER SHARE for a total of -$19,230.77! What?
Where are these numbers coming from? Please explain. I'll be happy to upload additional data, if someone can tell me what might help.
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System closed this discussion on 06 Mar, 2021 07:50 PM.