Pro Tips · Aug 5, 2026

Option Premium Is Cash Today, Not Profit Yet

A short option’s credit is an entry cash flow. This worked example separates cash received, open P/L, realized P/L and assignment basis without counting the premium twice.

PRO#wheel-education #options-basics #risk-management #trade-journal

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A desktop calculator on a light office surface — Photo: Anton Ehrola — Wikimedia Commons (CC BY-SA 4.0; cropped)

YieldCove Desk

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Published

Aug 5, 2026

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2 min read

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Selling an option moves cash into the account immediately, but the position remains open. FINRA explains that an option seller realizes a gain only by buying the contract back for less than the sale price, by letting it expire worthless, or through a favourable post-assignment…

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