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Expiring Covered Call Positions - Where is "Closed Position"?

jcoley2

My broker is managing a covered call account at Merrill Lynch.

I just had my first "worthless" covered call I sold last year expire in January. The call position shows a negative share balance from when it was established but even though we have passed the expiry date, it is still showing the share balance and corresponding negative balance.

After some research I read the following article:

https://community.quicken.com/discussion/7877414/how-to-enter-expired-options

So it would see I would need to enter a new transaction entry using a "close position" yet I do not see this option either in the register "action" column nor enter the button at the top called "Enter Transactions."

What am I doing wrong?

Note I am running version R54.16 and Build 27.1.54.16

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Comments

Jim_Harman

The linked discussion says

If you sold a covered call, close the position with a Cover Short transaction.

jcoley2

Ok I must be doing something wrong. So I entered a transaction on the Expiry Date (in this case Jan 19 2024) with a "Action" called "CvrShrt" with the Security for the Covered Call, shares equal to the number in the Position screen and value of O (screen shot attached).

Screenshot 2024-01-30 at 10.51.01 AM.png

And I get the following error statement:

Screenshot 2024-01-30 at 10.49.54 AM.png

What am I doing wrong?

Rocket J Squirrel

Hard to tell. Show us the transaction which opened the position.

jcoley2

Ok I have stitched together the entire transaction for this Eli Lilly covered call sale. Here is what happened.

Broker bought 60 shares of LLY on July 6 2024 and another 40 shares on 83/24 for a total of 100 share long. (You can see these in the search results I did below).) Also on 8/3/23 He wrote a covered call for 100 shares which Quicken records as "SrtSell". I assume that is correct but please confirm as that might be the entire issue of the problem. Option Expiry is 1/19/24.

Skip the dividend entries as they are not important to the issue on 9/8/23 and 12/8/23.

On Jan 22 2024 (next business day after Expiry) that Call Option is exercised and Quicken records a "Sold" action on the underlying stock (I suspect that is the correct treatment) and sold records a "Sold" Call Option (that is probably the issue and should be changed to "CvtShrt"—Please confirm. Note these assignments on "Action" come from downloading the transactions from Merrill Lynch (the broker.) Here is the Search Results on Eli Lilly:

Screenshot 2024-01-31 at 8.42.54 AM.png

Problem is now the Portfolio view is showing the Call position as "-200" as noted before.

Screenshot 2024-01-31 at 8.50.42 AM.png

Note I have this issue with three individual stocks that where called away via the call options. It appears Quicken has properly recorded the options that expired worthless. For example a CISCO Call option also expired worthless on Jan 19 2023. This was recorded automatically by Quicken after download from ML using "CvrShrt":

Screenshot 2024-01-31 at 8.55.21 AM.png

And the Portfolio view now shows a zero balance (not sure why it still shows in the Portfolio view but that's another issue):

Screenshot 2024-01-31 at 8.56.32 AM.png

So in summary (I know there is a lot of info here) it appears when there is an worthless expired covered call position and Quicken assigns "CvrShrt" it get properly closed out but when is the stock is called away then the call option is assigned by Quicken as "Sold" is incorrect and probably need to also be changed to "CvrShrt"—please confirm before I override the automatic assignment by Quicken.

Rocket J Squirrel

Long story short, as Jim said above, a position opened with a short sale must always be closed with a cover short, regardless of whether it expired or was exercised. If your brokerage erroneously sent a Sold transaction, you must hand-correct it.

jcoley2

@Rocket J Squirrel ok that worked. Deleted all the "Sold" traction for Expired Calls and entered in new "CrvShrt" positions on same days and this seems to have fixed that problem.

New problem is that the old zero'd out call positions still show in th3e Portfolio vie with Share Balances of zero. Any way to fix that?

Rocket J Squirrel

Each portfolio view has the option to "Show closed lots". Does turning that off not make the zero-ed out positions go away?

jcoley2

Under Options are the top right ,Show Closed Lots is unchecked.

I am too noticing other investment accounts also have zero balance securities showing in same view.

Any other way to stop those zero balance securities from showing up?

jcoley2

NVM Figured it out….turns out while the balance was zero in Shares, if you expanded the position there was a positive and negative share position offsetting each other to zero.

Turns out ML broker actually bought the covered calls back for a profit and rolled them and Quicken recorded the repurchase as bought as opposed to "CvrShrt" so I fixed them and now all zero balances are gone.

Going to have to pay more attention to the transaction being loaded from ML and correct them as they come in.