While trading options I notice that the account P&L is different from the sum of the individual position P&L's ?

Modified on 2011/10/04 07:51 by Rob Rrickson (CTS) — Categorized as: Uncategorized

Options risk is handled slightly different. The reason why the account P&L differs from the sum of the individual position P&L’s:

Long Options position: Ignore negative upl as loss is already counted in the premium paid.

Short Options position: ignore positive upl so that going short does not increase trading power.