I'm trying to calculate my return on investment (ROI) for an options position on margin that has been rolled. I'll give an example:
- Sell to Open (STO) a naked put position, for which I collect 100 premium, and the margin put up is 1000, for example. I have 1 contract.
- Roll the position by Buying to Close (BTC) the short, which costs me 50, and then STO another naked put for 150, with a new margin requirement of 1750.
I know each transactional ROI:
- STO 100/1000 = 10%
- BTC 50/1000 = -5%
- STO 150/1500 = 8.6%
My question is, what is the overall positional ROI, calculated from these transactional ROIs? How to weight each ROI?
Is it weighted according to the latest margin, so:
10.1000/1500 - 5.1000/1500 + 8.6.1500/1500 = 18.59%?