How to enter securities (stocks, options, futures, etc) into Wave?

n0stress4men0stress4me Member Posts: 9

Hi everyone. I'm new here and have a question about how to enter short term securities into Wave. The nature of my business is purely active trading of securities (stocks, bonds, futures, forex, Nadex, etc). I'm in and out of the transactions anywhere from 1 day to a couple of months at the most. I do my trading in a TD Ameritrade account. I'm planning on using the Cost Method for tracking the securities. All securities are purchased completely with business funds.
So, a few questions:
1. What account type do I use to create the TD Ameritrade account in Wave? I assume "Other Short-Term Asset"?
2. When I get into a new trade, how would I enter that transaction into Wave? The money used to purchase this security would already be in the TD Ameritrade account, so it wouldn't be a transfer. I'm not sure how to categorize this.
3. Finally, when I close the trade, it will either be for a profit or a loss. How would I track the profit/loss in the close transaction?

Sorry if these are super basic questions. Really appreciate the help!

edited April 3, 2020 in Using Wave

Comments

  • n0stress4men0stress4me Member Posts: 9

    I figured it out myself. Posting here in case it helps anyone else...

    I created the following accounts in Wave:
    • Assets
    • Cash and Bank
    • TD Ameritrade
    • Other Short-Term Asset
    • Trading Securities
    • Income
    • Realized Gains/Losses
    • Liabilities
    • Other Short-Term Liability
    • Unrealized Gains/Losses

    When purchasing a security:

    • I use a withdrawal in TD Ameritrade account
    • I categorize it to Trading Securities (dr - which adds this as a short term asset to the books)

    When selling the security:

    • I create a journal transaction
    • dr TD Ameritrade (proceeds)
    • cr Trading Securities (purchase price including fees - cost basis)
    • If I have a profit: cr Realized Gains/Losses
    • If I have a loss: dr Realized Gains/Losses

    Since I’m in and out of these very quickly, I’m not bothering with capturing unrealized gains/losses, but I can easily track market value changes using the Unrealized Gains/Losses account if needed.

    Now my balance sheet and income statement correctly show everything.

  • Kristian_GKristian_G Administrator Posts: 56 admin

    Hey @n0stress4me!

    Really awesome work here! The original question was a good one, but your answer was even better. We very much appreciate you posting your findings here for others to see/use in the future too. Cheers!

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