By continuing to browse this site you agree to us using cookies as described in About Cookies. This chapter focuses on the trade life cycle of exchange-traded options ETOs for long put.
The trade life cycle of exchange-traded options on writing a put option, and journal entries to be recorded during the different phases of this trade life cycle is also described. Illustration of writing put options in functional currency, including preparation of journal entries, general ledger accounts, income statement, and balance sheet after writing the put options is provided.
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If the put is purchased purely as a speculative trade, then the premium paid towards purchase of the put option is taken to the expense and the premium received on sale of the option is treated as revenue. If the options are purchased other than as a hedge, it is either for speculation or for arbitrage.
In this case the income account is debited when the options are purchased. BOOK TOOLS Save to My Profile Recommend to Your Librarian. BOOK MENU Book Home.
GET ACCESS How to Get Online Access. ABOUT THIS BOOK Table of Contents Author Biography. Accounting for Equity Call Options.
Venkata Subramani Published Online: Equities, Futures and Options, Volume I. Additional Information How to Cite Subramani, R. Publication History Published Online: ISBN Information Print ISBN: SEARCH Search Scope All content Publication titles In this book Search String.
Call option accounting journal entries call option OTM.
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This Chapter K All Chapters. Summary This chapter focuses on the trade life cycle of exchange-traded options ETOs for long put. Publications Browse by Subject Resources.