Trade History History: QQQQ Opt History: SPY Opt Simple to Use Trade Example Signal Example

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We recommend to invest only a small part of the assets in options - an amount that will fit the personal trading needs and risk tolerance. In our opinion, that amount could make up about 10% of the total portfolio, and it should certainly never exceed 30%.

A good investment strategy is to have a fixed amount of the capital invested in options, as long as this amount does not exceed a specific percentage of the total portfolio value, say 10%. For example, if the value of your portfolio is $50,000, an investor is ready to dedicate $5,000 to options trading. It is recommended to increase this amount only when the options trades are successful. For instance, if the value of the options portfolio goes to $10,000, then allocate $6,000 may be allocated to options trading.

It is not recommended to commit more than 30% of the options portfolio to a single trade. If the market does not move in favor, but indicators remain strong, an investor may choose to invest another 30% of the options portfolio on a second trade, and perhaps even on a third. By proceeding in this way, an investor will enter the market in a better position, and usually the profit from the last trade will more than compensate for the loss of the first. It is also a good strategy to diversify the second and third trades, by choosing other options, strikes, or expiration dates.

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