Planned loss is not maximum loss

Use separate labels for cash committed, a planned exit loss and the position's possible loss. Cash committed tells you what you pay initially. Planned exit loss describes a scenario using an assumed exit price. Possible loss depends on the instrument and what actually happens. A number in one field should not silently become a guarantee in another.

For a fully paid, unexercised long option, the option premium can be lost in full; charges add to the cash cost. Exercising or holding a resulting share position introduces a different exposure. A plan to sell the option at a higher price than zero does not turn that plan into a contractual maximum loss. For short options or combinations, this simple long-option description is insufficient.

Record what your worksheet does and does not cover. A stop, alert or written intention may help organize a response, but none makes an assumed sale price certain. Avoid describing a worksheet budget as ‘the most I can possibly lose’ unless the actual instrument and complete position support that statement. When uncertain, leave the maximum-loss field unresolved and identify the missing information.