Position Sizing

Thank you for your help. I did not know about the option to export data from Think or Swim to Excell in real-time. I will look into it.
I have some very strict rules regarding trades of equities. I never risk more than 0.5% of my portfolio per trade. I calculate my position size depending on my stop loss and the amount I am willing to risk. It's been working extremely well for me, allowed me to take all fear and stress out of trading. So far every month in 2006 has been profitable for me and I think this is the main reason. Obviously it is not that easy to do with options but this is where I want to get and I can't believe there is not a tool on the market that does that for you, just giving you the best strategy depending on your stops/targets and risk.
 
Quote from candeo:

Thank you for your help. I did not know about the option to export data from Think or Swim to Excell in real-time. I will look into it.
I have some very strict rules regarding trades of equities. I never risk more than 0.5% of my portfolio per trade. I calculate my position size depending on my stop loss and the amount I am willing to risk. It's been working extremely well for me, allowed me to take all fear and stress out of trading. So far every month in 2006 has been profitable for me and I think this is the main reason. Obviously it is not that easy to do with options but this is where I want to get and I can't believe there is not a tool on the market that does that for you, just giving you the best strategy depending on your stops/targets and risk.
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On the "trade" tab there's a small button in the top right-hand corner (the one with the printer icon), click that. It'll bring up a mneu, choose "Export to Excel" then open an Excel spreadsheet and click "paste" or "Ctrl+V". Once you do that the entire "trade" page with all options and the info layout you have setup there will be pasted into a spreadsheet, which will update in real time as long as you have the TOS platform running.

By the way, it's not as easy as just substituting stock with options. There are factors that need to be considered with options that you don't even know exist when trading stocks.
 
WOW, this is great. Thanks again for pointing at it, you have no idea how much this is going to help my trading. I am going to create a spreadsheet that does exactly what I need.
 
Quote from candeo:

WOW, this is great. Thanks again for pointing at it, you have no idea how much this is going to help my trading. I am going to create a spreadsheet that does exactly what I need.
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No worries! I had to make it up for being harsh.:)
 
optionsxress has a tool called Strategy Scanner that lets you input your dollar amount you are willing to "invest", say $500, then it asks you for a forecast, say "mild bullish" or "barely neutral" whatever that means LOL, and then it searches tickers and strats for you. The end result is you get some nice graphs showing you your risk profiles so you can choose between them.

As previous posters have suggested, studying the greek exposure of each strategy and taking risks according to your tolerance level is your best route.
 
yes, I use strategy scanner as well (Yes, I also have a OXPS account), but I find it useless, with most of the recommendations not fitting my trading style. Maybe it is better for traders who use options for hedging. Also, saying "somewhat bullish" is not very precise. A target price would be better.
 
Quote from candeo:

yes, I use strategy scanner as well (Yes, I also have a OXPS account), but I find it useless, with most of the recommendations not fitting my trading style. Maybe it is better for traders who use options for hedging. Also, saying "somewhat bullish" is not very precise. A target price would be better.
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Not sure if this is going to be of any use to you, but if you want something that gives you target price and a date to go with it, then you could try a piece of software called 'profitsource'. This thing scans the entire market(s) of your choice and throws out all the trades that fit EW parameters for that day, giving you price and time targets. You can then take this list and plug it into another bit of software (I use either 'optiongear' or 'platinum') that will then search this list for the strategies you want to use, giving you all the possible combinations, including greeks, roi etc.. For example, say PS finds some bullish trades and you want to place a bull call spread. You plug your stock(s) into the pricing model (say 'optiongear) and ask it to find all the possible bull call spread combinations (you can obviously modify the search criteria, e.g. strike, iv, expiry etc.). Once you find a spread you like simply follow MTE's instructions.
Best
ra
 
Quote from candeo:

yes, I use strategy scanner as well (Yes, I also have a OXPS account), but I find it useless, with most of the recommendations not fitting my trading style. Maybe it is better for traders who use options for hedging. Also, saying "somewhat bullish" is not very precise. A target price would be better.
More...
Not sure if this is going to be of any use to you, but if you want something that gives you target price and a date to go with it, then you could try a piece of software called 'profitsource'. This thing scans the entire market(s) of your choice and throws out all the trades that fit EW parameters for that day, giving you price and time targets. You can then take this list and plug it into another bit of software (I use either 'optiongear' or 'platinum') that will then search this list for the strategies you want to use, giving you all the possible combinations, including greeks, roi etc.. For example, say PS finds some bullish trades and you want to place a bull call spread. You plug your stock(s) into the pricing model (say 'optiongear) and ask it to find all the possible bull call spread combinations (you can obviously modify the search criteria, e.g. strike, iv, expiry etc.). Once you find a spread you like simply follow MTE's instructions.
It will of course be tricky to set 0.5% stop losses for options. For example, if you have $100k capital and risk 5% ($5000) on one trade and your stop loss is 0.5% of total capital ($500) then you're looking at exiting your trade when loss is 10% or more. I assume you realise that a 10% move in the value of the option spread is usually well within the bid/ask spread and you'd often be stopped out as soon as you got filled. Apologies if I'm saying things you already know.
Best
daddy's boy
 
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