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Options Trading
What's the cost basis when exercise options or get assigned?
What's the cost basis when exercise options or get assigned?

When you exercise a call option, the cost price paid for the underlying stock on a per share basis is the sum of the call's strike price plus the premium paid for the call and the trading fees charged by the exchanges and regulatory agencies.

Cost Basis = Strike Price + Options’ Premium + Fees

Likewise, when you are assigned on a call option which you have written, the cost price received on per share basis is the sum of the call's strike price plus the premium received from the call's initial sale, then minus the trading fees charged by the exchanges and regulatory agencies.

Cost Basis = Strike Price + Options’ Premium - Fees

When you exercise a put option, the cost price received for the sale of underlying stock on per share basis is the sum of the put's strike price less the premium paid for the put and the trading fees charged by the exchanges and regulatory agencies.

Cost Basis = Strike Price - Options’ Premium - Fees

Likewise, when you are assigned on a put option which you have written, the cost price paid for the underlying stock on per share basis is the sum of the put's strike price less the premium received from the put's initial sale, then plus the trading fees charged by the exchanges and regulatory agencies.

Cost Basis = Strike Price - Options’ Premium + Fees


Option trading entails significant risk and is not appropriate for all investors. Option investors can rapidly lose the entire value of their investment in a short period of time and incur permanent loss by expiration date. You need to complete an options trading application and get approval on eligible accounts. Please read the Characteristics and Risks of Standardized Options and Option Spread Risk Disclosure before trading options.

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