47: Options Trading Risk Management & The Indisputable Math Behind Optimal Position Sizing

The Option Alpha Podcast

Kirk Du Plessis

Education, Options Trading, Trading, Investing, Stock Market, Business, Finance

4.8 • 1.2K Ratings

🗓️ 30 May 2016

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

Show notes: http://optionalpha.com/show47 One of the key elements of becoming a more successful trader is the ability to absolutely master options trading risk management. And, contrary to what you might assume, it comes down to a couple simple things. Namely, determining and sticking to an optimal position sizing range for each trade and never allocating your the full value of your account at one time. In simple terms; don’t invest too much money in each trade and always have money lef...

Transcript

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0:00.0	You're listening to the Option Alpha Podcast from Option Alpha.com where we show you how to make
0:06.3	smarter trades learn how the stock market really works and generate consistent monthly
0:11.2	income. Now your host and head trader at
0:15.0	option alpha.com Kirk depluses.
0:19.0	Hey everyone this is Kirk here again from option alpha.com
0:22.0	working every single week to make this the most
0:24.1	popular investing podcast offered in iTunes and online because it's based on one thing and one
0:29.0	thing only and that's helping you make smarter trades.
0:31.6	So thanks so much again for tuning in today
0:33.8	and we've got a really cool episode,
0:35.3	one that I really want to challenge a lot of people on
0:38.0	and this is the idea of risk management.
0:40.8	And I want to do that by showing you some indisputable math behind optimal position
0:46.4	sizing things that I've talked about a lot and we kind of talked about position sizing
0:51.2	here on the podcast a couple times.
0:53.6	But today I really want to dig down deep into it.
0:55.8	We do it on some of our free courses
0:58.2	and in some webinars that we do.
1:00.4	But I think it's worth going over again and again because there's a lot of logic behind my 1 to 5% rule that I have and that I've had for many many years and I want to get into that math here today.
1:12.4	Now before I even begin to go through this And I want to get into that math here today.
1:13.0	Now before I even begin to go through this in detail, again, I just want to let you know that there'll be additional
1:18.3	slides and videos and links in the show notes page at option alpha
	...

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