Adjustments As Portfolio Grows

Discussion in 'Risk Management' started by Arnie Guitar, Jul 31, 2011.

  1. I'm not sure which forum to put this in, but this seems like the best bet.

    I trade weekly option credit spreads on the S&P500, primarily deep OTM puts. Through dumb luck and bi-weekly deposits, my account has doubled. Don't get me wrong, it's still very small by many standards, but as it's grown I've begun to question myself on position sizes and number of positions to take. I normally take 2-3 positions per week, sometimes 4 if market conditions allow.

    I'm tempted to keep the number of positions the same, just increase the number of contracts. If I were to increase the number of positions...well, there aren't more positions.

    The other thing would be to try and learn new things...metals, currencies...Then I think to myself, just keep doing what your doing until it stops working...kind of the "don't change horses in the middle of the stream" mentality.

    I'm not really sure where I'm going with this, just thinking out loud I guess...I'm a small fish for sure, but I often wonder how people with 6 and 7 figure accounts do it...100, 500, 1000 contract positions? Looking at the volume of contracts, there seems to be a limit. I think it's what people mean when they talk about "The Law of Large Numbers". There seems to be a limit on how big of a position a person could take.

    Miscellaneous ramblings for sure...maybe I should just go and have my morning coffee.....sorry...:(