how to utilize my capital
- Thread starter met1989
- Start date
You can't.
Trading "only" 1 ES with a $30K account? You're currently making a 5x leveraged play. That should be more than enough for anybody (other than those with a financial death wish.)
Of course... with a $30K account, some brokers will let you lever-up to 100X. But unless you're a really sharp and disciplined TA player, wouldn't recommend it.
Last edited:
i trade one spy option
Some consider risking greater than 1% per trade too aggressive. Some experienced and profitable traders risk even less.
Using 1 percent of starting account value is $300 allowable loss per trade. Assuming you are trading intraday and depending on your non scalping trading methodology, it would not be necessary to risk more than $.30 to $.50 per share on SPY. If SPY moves this far against your position, you’ve clearly missed the mark on most intraday moves.
Assuming you determine a reasonable stop would be $.50, Your maximum position size would be maximum allowable loss / maximum loss per share or $300 / .$50 or 600 shares.
For overnight positions, a stop level of a liitle beyond the previous days high or low or an average daily range would be a reasonable stop level. A reasonable position size in a swing position trade for spy might be around 100 shares.
You confused us here.
1. There is no "SPY contract"... only an OPTION "contract" on the SPY.
2. If you're playing "1 option", that's 100x$271 in play... IOW a nominal $27,000. With $30K equity in your account? And you want more leverage??
You have a $30k account.
The SPY is $275 per share, give or take. -- $27000 for one 100-lot.
The ES runs $2750, but exacts a margin toll dependent on the broker, of oftentimes well above that.
There are, however, many more vehicles besides the SPY which seek to mimic the S&P500 -- some of them are 1/10th the size. The SPY trades in millions per day -- the also-rans trade from half that volume down to 10s of 1000s.
If you're aiming at swinging, you don't need to deal with theta, too. Hit Google for some other S&P500 vehicles and have at it.
The SPY is $275 per share, give or take. -- $27000 for one 100-lot.
The ES runs $2750, but exacts a margin toll dependent on the broker, of oftentimes well above that.
There are, however, many more vehicles besides the SPY which seek to mimic the S&P500 -- some of them are 1/10th the size. The SPY trades in millions per day -- the also-rans trade from half that volume down to 10s of 1000s.
If you're aiming at swinging, you don't need to deal with theta, too. Hit Google for some other S&P500 vehicles and have at it.
You press it hard with 100 lots and daytrade margin
I guess what he meant was like this:
SPY price traded around $270.60 then if you buy one contract of option on SPY (controlling 100 share) at $269 (in the money) for Nov 2nd (short term play), then it only costs you $350, and that is the max risk if you lose it all in that trade. So he felt he didn't fully utilize his capital, because of the rest of the fund $29650 is idle. One ES future contract would be a complete different story.
SPY price traded around $270.60 then if you buy one contract of option on SPY (controlling 100 share) at $269 (in the money) for Nov 2nd (short term play), then it only costs you $350, and that is the max risk if you lose it all in that trade. So he felt he didn't fully utilize his capital, because of the rest of the fund $29650 is idle. One ES future contract would be a complete different story.
Last edited:
You can’t without increasing you risk % or affecting your trading performance, double the contract size, half the SL which can slip in a bad move against you anyway, is likely to have a bad effect on your win rate.
Personally I’d double my risk, leave the account at 30k via withdraws and manage the risk by moving 50% of withdrawls into a recovery fund just incase, until you’ve got 30k backup account.
Personally I’d double my risk, leave the account at 30k via withdraws and manage the risk by moving 50% of withdrawls into a recovery fund just incase, until you’ve got 30k backup account.