Trading CFD's and Selling Short

penury at umich.edu penury at umich.edu
Tue Apr 12 17:28:57 EDT 2011


GnuCash is more of a transaction recording system than a financial analysis
system, so you're likely to have to roll your own system, so to speak.

For instance, GnuCash won't easily pick up CFD valuations unless they are
listed on a regular exchange, and even then, the reporting functionality
won't really recognize the issues associated with a CFD (i.e. what it's
appropriate cost basis is, how your return should be calculated, how margin
calls affect the cost basis, etc.)

So, how you build the system will depend entirely on what information you
want to get out of the recording system, i.e. is it really about performance
reporting, tax reporting, or attribution analysis.  I'd say, mostly, that
GnuCash is really best set up for either (1) just booking the value of your
contracts, or (2) helping you in tax reporting.

Anything else should probably use a spreadsheet (especially the attribution
analysis where you'd probably need some specialized calculations to
differentiate, say, the value of the stock tip over the general effect of
macro market movements).

Assuming for the moment that you'll have to craft all your value movements
and cash flows by hand, I'd think the simplest way to do this would be just
have a generic "asset" in your brokerage account setup that you revalued
periodically to maturity, recording realized gains, dividends, interest, and
margin calls as they came, and then wrapping the thing up either when you
unwound it or it matured.

So, something as simple as:

Assets:Brokerage A:Cash Margin Account
Assets:Brokerage A:CFD#XXX on BHP

T

> -----Original Message-----
> From: gnucash-user-bounces+penury=umich.edu at gnucash.org
> [mailto:gnucash-user-bounces+penury=umich.edu at gnucash.org] On Behalf Of
> John & Jenny Ireland
> Sent: Monday, April 11, 2011 5:52 AM
> To: gnucash-user at gnucash.org
> Subject: Trading CFD's and Selling Short
> 
> Hi,
> 
> I am very impressed by GnuCash, and it's documentation.
> 
> I am up to the stage of designing my set of accounts, and would like to
> know
> the neatest or most elegant way to record my trading.
> 
> Jenny and I are retired and we both trade shares in individual
> accounts. I
> have no problem there, the documentation is excellent.
> 
> We also have an Australian SMSF (self managed super fund) and Jenny
> trades
> shares and can trade short, I trade CFD's (contracts for difference)
> and
> trade long and short on margin.
> 
> e.g. Open a CFD for 1000 BHP SHORT at $50.00 on 10% margin.    What
> happens
> is that 10% or $5000 is debited to the fund's equity account, and the
> proceeds of the sale credited to an account with the broker who pays
> short
> interest on it (these numbers are updated daily with price movements),
> and
> 1000 BHP is debited to the contract.  When the short is covered all
> this is
> washed up and the only thing that has to remain in the accounts is  '
> P/L
> on Contract No. ****,  +/- $x '
> 
> or  Open a CFD for 1,000,000 FML LONG at 5c on 35% margin.    Similar
> outcome but $17500 is debited from equity, the broker makes up the rest
> and
> buys the shares so he can enter into a contract with the fund, and
> charges
> long interest on the full value.  The fund receives interest on its GLV
> (gross liquidation value) including the $5000 and $17500 deposits.
> 
> The three interest rates are different.
> 
> 
> So is there a good way to set this up so we can keep a running balance
> of
> the accounts, and of each instrument ??
> 
> Also, we trade on recommendations (tips) that come from several
> different
> sources. Is there a good way to amalgamate the results from each source
> which may be spread over the four accounts ??
> 
> Now perhaps this is not what GnuCash was designed for, and I should do
> my
> analysis in, say, Excel, and slash and burn at the EOY for the tax
> return.
> 
> Before I tear my hair out, I thought I should ask for advice and help.
> 
> 
> Thank you very much, I may be able to pass on the outcome to other
> users.
> 
> 
> Kind Regards,    John.
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