The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about how to calculate options profit and loss as a percentage. And the reason I want to talk about this is because I’m seeing a lot of people who are confused on how to calculate the amount of money that they’re making on a trade as a percentage of the trade itself. Now, I’m not talking about calculating this as a percentage of the overall account. That should be actually pretty intuitive and pretty easy to calculate. Just figure out how much you make and divide that by the account balance that you have and you figure out how much you’re gaining on the whole account. But the end result here is that I do see a lot of people and also companies misrepresent what they're making because they’re calculating everything based off of the option profit for the individual strategy or contracts that they’re trading, not necessarily the whole account. There's only two ways that you can calculate… T