assigned put options are posting incorrect transactions


When a put option is sold short and then months later assigned,

the correct steps to make are.

  1. cover the option.
  2. buy the stock at the put price.

what quicken currently does is:

  1. sell the option (again). ERROR !
  2. but the stock at the put price. CORRECT !

this leaves the shorted option and creates another sold position, instead of removing the option which was converted into ownership of the underlying stock.

For me, this occurs incorrectly with Etrade and Merrill Lynch, but I suspect it will do so with all brokerages.


  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭

    The correct accounting in this situation is to close out the Put at no gain or loss, leaving cash unchanged, and then to buy the stock at the strike price specified in the Put minus the cash received for selling the Put.

    It looks like Etrade uses EWC+ for downloading while ML uses Direct Connect, but in either case Quicken is simply mimicking whatever information is being sent by one or the other of the brokerages. With Direct Connect it's the brokerage that does the coding, with EWC+ is still unclear (to me at least) if the Aggregator (Intuit) does the coding or if the brokerage puts that together. A different brokerage that uses Direct Connect might be able to put together a proper sequence of transactions, but brokers aren't accountants and neither are the coders so, generally you simply can rely on "downloads" from brokers to do the proper accounting for any situtions that are the least bit complex.

    So delete the downloads (or don't accept them in the first place) and make your own entries.

  • richardb5
    richardb5 Member

    Thank you Tom,

    That is what I do about 50-100 times a year.

    It would be appreciated if it would be done correctly.

    I have reported it as an error to quicken and Etrade and Merrill Lynch, and to date, no one is fixing it.

    Now that I know it is Etrade and Merrill who needs to make the corrections, maybe they will take responsibility.

    Oh well.

    as to your comment, i agree coders and brokers are not accountants. I was a systems programmer 45 years ago. we had systems designers meet with the client and ask questions before designing the software to get the specifics. they would meet with the executives as well as the clerks and managers along the chain of command to meet everyone's needs before turning the design over to the programmers. It sounds like not much thought goes into the designing anymore, just let a programmer solve it with whatever assumptions they may make… I do hope brokers realize the way to complete a sell short is to cover the short…

  • gulfcoastpaul
    gulfcoastpaul Member ✭✭
    I remember "Microsoft Money" dealt with options (puts and calls) downloaded from my broker. So why can't Quicken correctly download them from my broker(Schwab). They have had years to find a way. Paul
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