it's whatever you have man and what fits your risk profile and
trading style. The trade tables I show - I don't intend that folks
do those exact sizes. 10K for ETF's is very small for example
unless one has a really small account. I assume most are doing much
larger sizes for those. For options, I don't know what folks do.
some may do the 1,2,3 like I show and others who like to bet larger
might be taking 2 or 4 or 10 contracts on entry, and then doubling
that for 2nd entries. What I show is just a base amount.
obviously if you only have 1 contract you can't divide it so you
have to make your own decision on that.
So that I don't continue to get this question I have thought
about doing 2, 4, 6 for the 1st, 2nd, 3rd entries on the options
because then there's not question about it. One may also choose not
to take partial off and just stick with system until it closes
Posted by DigiNomad on 25th of Jul 2022 at 03:31 pm
You can divide one long contract by shorting a number of shares
equal to 1/2 the current delta (if you want to take off 1/2 risk).
Note that using delta this way requires adjustments along the way
as volatility and time to expiration change (the other
greeks)...but it's always worked pretty well for me, especially in
short term situations.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
it's whatever you have man
SPY and ES systems early trade notification
Posted by matt on 25th of Jul 2022 at 03:29 pm
it's whatever you have man and what fits your risk profile and trading style. The trade tables I show - I don't intend that folks do those exact sizes. 10K for ETF's is very small for example unless one has a really small account. I assume most are doing much larger sizes for those. For options, I don't know what folks do. some may do the 1,2,3 like I show and others who like to bet larger might be taking 2 or 4 or 10 contracts on entry, and then doubling that for 2nd entries. What I show is just a base amount.
obviously if you only have 1 contract you can't divide it so you have to make your own decision on that.
So that I don't continue to get this question I have thought about doing 2, 4, 6 for the 1st, 2nd, 3rd entries on the options because then there's not question about it. One may also choose not to take partial off and just stick with system until it closes
You can divide one long
Posted by DigiNomad on 25th of Jul 2022 at 03:31 pm
You can divide one long contract by shorting a number of shares equal to 1/2 the current delta (if you want to take off 1/2 risk). Note that using delta this way requires adjustments along the way as volatility and time to expiration change (the other greeks)...but it's always worked pretty well for me, especially in short term situations.