Okay so this may be a dumb question because I'm not sure I'm thinking about this correctly…
I've been trading options for about 4.5 years and was trying to figure out my ROI for that period and then annualized as well. At first I'm thinking I'll just use the standard ROI formula using my cost basis and gains across the sum of all my trades…but then I got thinking this might not be the best way to do it because the "cost basis" is essentially resued for many trades…so I feel like the cost basis is inflated in a way calculating it like that.
Should I instead be calculating the ROI for each trade and then, what, doing some sort of weighted ROI to get my overall ROI?
If anyone has thoughts on this I would appreciate it.
Posted by FIRE_Science