# Annualized Return calculation

# Annualized Return At Open

This is calculated by taking the credit on a sold option over the remaining days to expiry and then annualizing that number.

For example;

```
$100 credit from selling option
$900 risk ($1000 risk - credit)
Return = 100/900 = 11%
30 days to expiry % 365 days in a year = 12.16x
11% x 12.16 = 133%
```

This is not compounded. This is averaged across all of your open trades.

# Annualized return at Close

This uses the same calculation except it uses the realised profit & loss on closed trades only. It measures how long the trade was opened.

For example;

```
If your call you sold for 30 days is closed after 10 days for 50% profit (using the example above)
$50 final credit from selling option (50% profit)
$900 risk ($1000 risk - credit)
Return = 100/900 = 5.5%
Closed after 10 days instead of 30 % 365 days in a year = 36.5x
5.5% x 36.5 = 200.75%
```

Updated on: 26/03/2023

Thank you!