plaintextaccounting/src/Investing-and-trading.md

% Investing and trading

Stocks, EFTs, cryptocurrencies, etc. (The journal entries are much the same for any of these, so feel free to translate examples to different commodities.)

The main challenge of accounting for investments and trading in PTA is tracking lots and disposing (selling) them in the right order. Here are several methods:

1. Lot subaccounts (works with any PTA app). Each lot is given an explicit subaccount, entries are created manually.

   • hledger/ledger example: https://forum.plaintextaccounting.org/t/repost-example-calculating-uk-capital-gains-with-ledger/227/2

2. Lot syntax (works with Beancount or Ledger). The app has special syntax and support for lots.

   • Beancount: https://docs.google.com/document/d/1F8IJ_7fMHZ75XFPocMokLxVZczAhrBRBVN9uMhQFCZ4/edit#heading=h.katmw1lwm4yh
   • Ledger: https://ledger-cli.org/doc/ledger3.html#Buying-and-Selling-Stock
   • docker-finance (discussion) does many things, some trading related. Runs hledger and hledger-flow.

3. Lot entry-generating tools. Add-on tools help generate lot-aware entries.

   • lotter detects lots from ordinary transactions, adds lot information to buy/sell entries. (Works with Ledger.)
   • hledger-lots detects lots from ordinary transactions, helps make buy/sell entries. (Works with hledger.)
   • hledger-move is a lower-level tool to help make trading (sell) entries. (Works with hledger-compatible journals.)

Sometimes calculating average cost basis is needed, and this another challenge, currently not well supported.

More:

• Beancount: Inventory Booking (2014), discussion
• Beancount: Calculating Portfolio Returns (2020)
• hledger Cookbook: Investing and trading
• Restricted stock units
• Cryptocurrency another discussion of lot subaccounts
• Example: calculating UK capital gains with ledger plus useful reference links