I'm getting into option strategies and trying to develop a risk model for the capital i have (about 4k). My platform is IB TWS. The risk/reward of options strategies can be complicated when you start factoring in probabilities and integrating risk over a series of trades as opposed to just a single trade. How much, in relative terms to your account, do you typically risk on option contracts at a given time? (In other words, how much of your account is at risk at once, integrated over all your options positions) What is the best way of calculating the risk of, say, a short butterfly call, considering maximum loss is unlikely, but probability of any loss is significantly likely? Is their a more effective way of calculating this risk than just simply integrating over the loss zone, assuming a normal distribution of underlying price at the expiration date? How do you maintain a risk measurement of the trade after you've entered it, and the ongoing movements of the underlying change the probabilities of PnL?