Closing an option, step by step.

Import guides  /  Closing an option

Every contract ends one of five ways. Each one has its own button, and none of them asks you to retype a strike or an expiration you already own. Find the case that matches what happened, follow its steps, and the gain or loss lands in your total return on the day it happened.

Which case is yours?

Bought back or sold

Buying back a contract you wrote and selling one you bought are the same action. Closing at a gain and closing at a loss are too — enter what actually happened and FolioBright works out which it was.

1. Click + Add Transaction and open the Options tab.
2. Pick the account and the date the trade filled.
3. Choose Closing a contract.
4. Under Which contract?, pick it from the list. The list shows only the contracts that account holds, so the strike, the expiration and the side are already filled in.
5. Enter the number of Contracts you closed and the Premium / share you paid or received — the price your broker quotes, so 0.05 is $5 a contract.
6. Save. The contract leaves your holdings, the gain or loss is realized on the day you entered, and the cash moves the right way.

Expired worthless

For anyone who writes options this is the most common ending, and the one most often never recorded: nothing happens at the broker, so it is easy to forget. Until it is recorded, the contract still shows as open.

1. Click + Add Transaction and open the Options tab.
2. Pick the account and the expiration date.
3. Choose Expired worthless and pick the contract.
4. Save. There is no premium to enter: the contract ends at $0. If you wrote it, the whole premium you collected is now your realized gain; if you bought it, what you paid is the loss.

Assigned or exercised

An assignment is two things at once: the contract ends, and shares move. FolioBright records both in one action and fills in the share leg from the contract itself — 100 shares a contract, at the strike.

1. Click + Add Transaction and open the Options tab.
2. Pick the account and the assignment date.
3. Choose Assigned (or Exercised, if you were the one holding the contract) and pick it.
4. Check the share leg FolioBright prefills. A written put assigned to you buys 100 shares a contract at the strike; a written call assigned away sells them.
5. Save. The contract closes, the shares move, and the premium goes where IRS Publication 550 puts it: off the cost of shares you were put, onto the proceeds of shares called away.

Your total profit is the same whichever way the premium is filed. Filing it with the shares is what makes the split between the option and the stock read the way your broker’s 1099-B does. The four cases are set out in the options guide.

Rolling

Choose Rolling it, pick the contract you are closing, and enter its fill. The new strike, expiration and premium go on the same screen. Save once and you get two records — the close and the new open — each with its own gain, loss and tax lots.

Letting the import close them for you

If you import your brokerage history, you rarely need any of the steps above. The importer reads buy-to-close and sell-to-close rows, expirations, assignments and exercises out of the file and closes the right contract on the right day.

1. Download your brokerage’s activity history with the option rows left in — the opens, the closes, the expirations and the assignments.
2. In FolioBright, click Import CSV, drop the file in and pick the account.
3. Read the preview. Will import shows each row and what it becomes; Skipped & duplicates shows every row that will not import and exactly why.
4. Import. Rows already in your book are recognized and not added twice, so a file that overlaps an earlier one is safe.
5. Anything left in Skipped that should have come in, record by hand with the steps above — and tell us, because a row the importer cannot read is ours to fix.

Checking it worked

Open Investment Accounts: a closed contract is gone from the account’s holdings. Its gain or loss is in Reports → Realized Gains (Tax) Report for the year it closed, and in Total Return. A contract still showing after its expiration date is one that was never closed — use Expired worthless on it.

Coming soon: how-to videos

Short videos walking through each of these on screen are planned. Until then, this page is kept current with the app.

Related

Nothing to install

FolioBright reads the file and stores the transactions in your own FolioBright account. There is no brokerage login to hand over, no read-only credential, and no third-party aggregator sitting between you and your holdings.

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