On average, how much of a available margin cushion do you keep in your trading account? Right now, I'm at about 34%. I'm itching so bad to enter more positions that expire this month, but I feel like I'd be being greedy. All of my current positions look as if they'll expire OTM, with a nice ROE, 4% for the month, which is just fine with me. A little voice in the back of my head says stay put, so that if things go wrong, I'll have enough to make some moves to avoid serious damage....but there's that 34% of available margin just sitting there... So as a percentage, how much do you think an average options guy like me should keep on the side?...my experience and knowledge have been made public on this forum for quite awhile.
First of all..you should have a plan for the entry, and exit, along with projected P/L before you enter any trade. And then do not change it. I know it is hard to fight the voices in your head. That "Committee" of "Me" and "Myself", always gets "I" in trouble when I listen to them. When I have deviated off the set plan, it has burned me a couple times. Personally I pretty much go about 85-90% in on every trade. I figure out how much margin is needed for the monthly $ amount goals that I have set for each month. I strive for at least <9% gain each month. My thoughts on this is...money sitting on the side is just that...sitting.
I also tend to be fully invested 80-90% of the time. I wouldn't hold capital back because I thought the market would fall - I'd deploy it in anticipation of the fall, i.e. short calls or long puts. Not necessarily right or wrong, just my way of operating. Hmm, voices in head, early signs of Schizo ?