Hi Martin, I finally had time to get back to this and I found this
discussion you probably referred to:
https://groups.google.com/g/ledger-cli/c/zQHC7S80t90/m/3Ft8Tyr562sJ
This seems to almost make sense to me but I couldn't get this to work as I
expected. Not sure if the problem is in my ledger or my understanding of
exercising options. Either way I hope you could help a bit:
For my case I have the following situation:
Options: 10
Strike price: 6.19
Cost basis 6.19/10 = 0.619
Market value at the time of exercise: 9.56 EUR
And I tried the following:
2018-01-01 open Income:Vincit:OptionsVesting
2018-01-01 open Income:Nordnet:Vincit:Gains EUR
2018-01-01 open Expenses:OptionsExercise EUR
2021-03-31 * "Acquire options"
Assets:Nordnet:VincitOptions 10 VINCIT_OPTIONS {0.619 EUR}
Income:Vincit:OptionsVesting
2021-05-10 * "Exercise options"
Assets:Nordnet:VincitOptions -10 VINCIT_OPTIONS {0.619 EUR} @ 9.56 EUR
Assets:Nordnet:Vincit 10 VINCIT { 9.56 EUR }
Income:Nordnet:Vincit:Gains -27.51 EUR
Expenses:OptionsExercise -61.90 EUR
Beancount accepts this but when I checkout my Fava balance sheet I see
following:
Assets:Nordnet:Vincit 104 VINCIT (should be 104 + 10 = 114 VINCIT) and in
EUR column there is "95.60"
Assets:Nordnet:VincitOptions 0 (this seems ok since I exercised them)
I suppose this might be some conceptual misunderstanding I have but when I
get more VINCIT stocks by either exercising or buying them, shouldn't they
just be added up to the VINCIT account as units in my ledger and not as
EURs?
Another thing I don't really get is the Gains part of the exercise
transaction. I mean of course I gain value by exercising the option by
lower value than its current market price, but shouldn't that just show up
as a gain in the value of my stock position and not as direct income since
I'm not selling the stocks immediately on exercise? Like shouldn't the
exercise leas to 10 new lots of VINCIT with value of 6.19 EUR?
keskiviikko 7. huhtikuuta 2021 klo 4.00.34 UTC+3 bl...@furius.ca kirjoitti:
> Search on the mailing-list I'm pretty sure this came up before.
> I'd have recognized call options using a unique symbol at zero cost and
> 6.19 is the strike.
> Then on exercise reducing them while simultaneously opening a position in
> the company at the current value, reducing the cash account by the strike
> times the number of units and adding a posting for the profit to be
> recognized as income.
>
>
> On Tue, Apr 6, 2021 at 6:27 AM Tuomas Salmi <salmi....@gmail.com> wrote:
>
>> Thanks for reply. Looks like my terminology is a bit off since I this is
>> first time I have had to think about this in English.
>> What I meant was that my employer gave me 10 options which let me to
>> purchase stocks with the fixed price which was set when options were given
>> to me. In this case I can buy COMPANY for 6.19 euros regardless of the real
>> rate of the COMPANY in stock market. So I think you are right about
>> "exercise" being the correct term.
>>
>> > Your transactions seems incomplete to me.
>> > You will want to represent the options themselves using a unique
>> instrument name with the strike, side (put/call) and expiration
>> data embedded in the symbol.
>> > You will want to carefully adjust the sales price vs. cost basis and
>> recognize the P/L to the right account if this is a company incentive (I
>> believe the initial P/L may be treated as income tax, not gains).
>>
>> Do you have any example of representing options like this? I think in
>> Finland the initial P/L is treated as income tax. However, for my personal
>> ledger in general I'm not too concerned about taxing details since almost
>> all personal taxing process is done by taxing organization in Finland. So I
>> don't usually track those details in my personal ledger and I'm happy with
>> having the correct balances on each of my accounts. However, I suppose I
>> might have to be a bit more careful in this case.
>>
>> To be honest I think for my purposes it would be enough to just add 10
>> COMPANY stocks to my Assets:OtherBank:Company with correct sales price and
>> deduce the 61.90e from my cash bank account.
>>
>> maanantai 5. huhtikuuta 2021 klo 8.23.48 UTC+3 bl...@furius.ca kirjoitti:
>>
>>> Hi Tuomas,
>>> I don't understand your terminology.
>>> "Marking" is the process of valuing active positions for the purpose of
>>> calculation unrealized P/L.
>>> I think you mean "exercise."
>>>
>>> On Sun, Apr 4, 2021 at 6:49 AM Tuomas Salmi <salmi....@gmail.com> wrote:
>>>
>>>>
>>>> Recently my employer let me to mark some stock options I had and I'm
>>>> having trouble to add them properly to the Beancount ledger.
>>>>
>>>> Lets say I had 10 options letting me to buy 10 stocks of COMPANY. Looks
>>>> like the transaction will be made first to my incentive bank account and
>>>> then I'll transfer the bought stocks to my actual bank which holds my
>>>> stocks.
>>>>
>>>> I tried the following:
>>>>
>>>> 2021-03-31 * "Mark options"
>>>> Assets:OP:BankAccount -61.90 EUR
>>>> Assets:IncentiveBankAccount:Company 10 COMPANY {6.19 EUR}
>>>>
>>>> 2021-04-01 * "Transfer stocks to other bank account"
>>>> Assets:IncentiveBankAccount:Company -10
>>>> COMPANY
>>>> Assets:OtherBank:Company 10 COMPANY
>>>>
>>>> The beancheck accepts this syntax. However when I check the account
>>>> balances in the Fava, I see that the end balance for
>>>> "IncentiveBankAccount"
>>>> is:
>>>> 61.90 EUR
>>>> -10 COMPANY
>>>>
>>>> So it seems like the Beancount will use two separate units for the
>>>> "IncentiveBankAccount".
>>>>
>>>
>>> You need to use the cost basis on your transfer.
>>>
>>> Your transactions seems incomplete to me.
>>> You will want to represent the options themselves using a unique
>>> instrument name with the strike, side (put/call) and expiration
>>> data embedded in the symbol.
>>> You will want to carefully adjust the sales price vs. cost basis and
>>> recognize the P/L to the right account if this is a company incentive (I
>>> believe the initial P/L may be treated as income tax, not gains).
>>> There is much to say.
>>>
>>>
>>>
>>>
>>>>
>>>> So how should I mark the following transactions to get all this sorted
>>>> out:
>>>> 1. Pay 61.90 EUR from my cash bank account to buy 10 COMPANY stocks to
>>>> IncentiveBankAccount account (balance -> 10 COMPANY)
>>>> 2. Move 10 COMPANY from IncentiveBankAccount to OtherBank:Company
>>>> (balance 10 -> 0 COMPANY in incentive)
>>>>
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>>>>
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