How do you track a leveraged position?

crosseba

How do you correctly track a leveraged position so that the portfolio percentage gains are correct? Let's say that you use 1.5 leverage and purchase $15k worth of securities for $10k of your own money? How would you calculate the percentage gained or lost based on a $10k basis instead of $15k? If you input the position as $10k basis then you would get a 50% gain right off the bat. Also, how would you correctly input interest charges on the money that you borrowed? Would a DivTA transaction with the amount of interest taken out instead of in be kosher?

VidasMatelis

Hi,

Sorry but leveraged positions are not supported by PS.

crosseba

I think I ended up making it work. In the margin account I deposited $10k cash, but bought a total of $15k in securities. Is the way that performance is calculated is the percent $ change from one day to the next for the total account? If so, I think this way of doing it may work.

VidasMatelis

Sorry, I missed your post. But your approach might not work properly - that is you will have negative balance and that could cause error in calculating rate of return. So you might think that you will get results, but you will not be able to trust them. so I would say this will not work.