market down and there are too many

Discussion in 'Options' started by mikeenday, Jun 16, 2011.

  1. mikeenday

    mikeenday Guest

    positions open in my account.

    puts: GS, MRVL, F, JKS, RIMM, LVS, MGM..

    it looks like a mess, how are the professionals manage their positions? and is there a rule associated with it?
     
  2. A good rule would be to not trade more positions than you can manage
     
  3. rmorse

    rmorse ET Sponsor

    Our platforms have some type of risk manager. On one "page" you can view your Greeks per position and see totals. This is very common.
     
  4. Bowgett

    Bowgett

    They manage it by looking at different reports that aggregate positions by using metrics.
     
  5. Doesnt sound like very many positoins to me. I don't really like sell stops on options because I never want to hit the bid if the spread is wide, so I just put alerts in on the stock prices.

    So if XYZ stock trades above $X.XX you get a text message and know to open up a chart and make a decision.

    I think 20 combos should be managable. If your just doing long puts, then your basically just short stock (-delta, -theta) and managing 10 shorts can be real challenging.

    If that's the case you probably need to upgrade your hardware / software to watch 10 positions simultaneosly. If you want to close 10 positions in 10 seconds, I have two words for you: "sell market".
     
  6. +1 to what kztrading said re getting an alert if the ul reaches a certain price.

    if trading that many (that's not a lot) individual stocks is too much just trade industry/sector/market etf's. less stock specific risk and usually cleaner patterns.