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Position sizing = Not having too many eggs in one basket and knowing what is the maximum damage that can be caused to a single egg. Some rules could be: (1) Using up to 50% of total available margin = Overall Position Size Limit, and, (2) Limiting maximum loss per trade to less than 0.1% to...

Thanks for your responses. I had stop breaches too on illiquid options and paid the price for it.

Have you tried Quantopian?

I second this approach. Challenge is to set a large number of trades to distribute the risk. Needs a large pipeline and a low cost broker. Wouldn't like going into a naked trade without position sizing. It is too risky.

Hi, I have a Short PUT for SYY expiring on 19-May-2017 with Strike Price $50. The premium earned is 25 cents. I use Interactive Brokers TWS. I want to take profit if the premium falls to 10 cents and protect it with a stop-loss limit if the premium goes above 50 cents. This order should be...

Your interaction with Pekelo was enlightening. Thanks for guiding me to it, Ironchef. Agree with your point on looking at each trade as a stand-alone. I started off writing nakeds. Burnt my fingers with margin calls. The "tuition" helped me understand the importance of risk management. And so...

Thanks for the response beerntrading. In IBKR my bull put spreads are shown as a "Buy" - for instance, on an order like this on ESRX Short $55 Put for June 2017, and, Long $52.5 Put for the same expiry. ...and so I called this a "Buy" too. Is that incorrect? And just to make the question...

Hi, I have been buying bull-puts for stocks trending down and bear-calls for stocks trending up at 1.2 SD with > 30 days expiry. Some of them have been assigned. These stocks have reasonable liquidity. What is the best strategy to handle the assignments? a) Close them out and take an...