I think that MTE is revealing one of the secrets of success with IC's, and I totally agree with his approach. "Don't overleverage!"
If you have no margin room left when you set up your IC, you give yourself very little room to adjust. With a moving market like we have had in the last six months, you need to have plenty of breathing room to roll up, and maybe more than once.
As well, a little insurance (like Mark recommends) can be a big help during times like these. In fact, under many circumstances, it can make you MORE money than if you didn't have it. It costs money of course, but a modest OTM debit spread (say about 80 points out on the SPX and 10-15 points wide, or 120 on the NDX at 25 points wide) can turn into a fair bit of cash if the market keeps on rolling toward your further OTM credit spread.
Remember, you want to be there for the long haul. Even if you only make 1-2% per month net after all costs, and including losing months, you will be doing just fine, and will have a good chunk of dough in time. Be patient, take sensible risks, and prosper.
If you have no margin room left when you set up your IC, you give yourself very little room to adjust. With a moving market like we have had in the last six months, you need to have plenty of breathing room to roll up, and maybe more than once.
As well, a little insurance (like Mark recommends) can be a big help during times like these. In fact, under many circumstances, it can make you MORE money than if you didn't have it. It costs money of course, but a modest OTM debit spread (say about 80 points out on the SPX and 10-15 points wide, or 120 on the NDX at 25 points wide) can turn into a fair bit of cash if the market keeps on rolling toward your further OTM credit spread.
Remember, you want to be there for the long haul. Even if you only make 1-2% per month net after all costs, and including losing months, you will be doing just fine, and will have a good chunk of dough in time. Be patient, take sensible risks, and prosper.
