Today we began responding to a situation that is reducing the relevancy of our unrealized gains/losses pin regards to our portfolio net value. In the case of a buy/write how unrealized losses handles the sold call option is technically the safest method – cost basis is established as the cash inflow at the time of sale, and if our prediction regarding stock price movement is accurate the ask price will increase (along with the fact that ask price will have been higher even at the time of sale). This means that for the duration of the position the call option will continue to take unrealized losses until it expires. This will always remain an important statistic – what would the portfolio be worth right now if we tried to convert it to cash in its entirety. However, net present value of the portfolio will start to diverge from this value by an increasing amount and it is therefore important to publish both of those values side by side.
We have decided to stop simply storing the number provided by schwab’s calculation. While this number will always be accurate, and can be used later to audit our automation we will be dramatically altering the math behind the daily report over the next week. This will occur alongside a full redesign of the page to bring it in line with the current position reports provided on US Steel and Oasis Petroleum.