Hello everyone, I have created this thread to share and debate our methods of risk management. As far as I am concerned, in this context, there are two (2) major pieces to risk management in trading options; technical analysis, which manages intra-market risk and; money management, which manages intra-account risk. This is how I manage my risk: Part 1: Intra-market risk (technical analysis) Technical analysis of blue chips (SPY, AAPL, BAC, FB and TSLA) to find market sentiment, trend, condition and best risk-returns; After macro analysis, I set my three (3) points of interest; the entry, the stop and the profit; The three (3) points of interest are targeted to be traded in the volatility and liquidity of market open where best intraday risk-returns exist and finally; My risk-return on the market open has a massive edge of at least 5:1, and I do get stopped out more than 50% of the time, but my winners are worth the pain. Part 2: Intra-account risk (money management) The best intra-market risk determined in part 1 is transferred to weekly option contracts by taking 2% of the trading account, dividing it by the difference between the 'the entry' and 'the stop,' dividing it by ATM contract delta (usually .50) and finally subtracting 1 contract to account for spread risk to arrive at my order quantity for that particular trade. It looks like this; OrderQuantity = [(2% of Account) ÷ (TheUnderlyingEntry - TheUnderlyingStop) ÷ (100Shares/Contract) ÷ (Weekly ATM Delta)] - 1 Example; If my risk on SPY one morning is $0.10 and my account $1200 dollars, I would trade 4 contracts I enter the trade at 'the entry' where the market sentiment is favourable and the ticks are moving in the direction opposite of my trade to buy the contracts at the ask. I exit at the stop, no more, no less, no fucking around. I pay the account on the way to 'the profit' and the position is fully off by the time the market is still crossing 'the profit' so that all the contracts sell at the ask. The whole goal is to; a) Find the edge through technical analysis and; b) Give the least amount of money away through money management. Thanks for reading. Please share yours below.