Question: How Much Money Should You Use For Option Selling

Question: How Much Money Should You Use For Option Selling

Hi,Like most people I have various accounts. The account in question is what I normaly “traded” out of. This is not my retirement account but an account to hopefully help build wealth not preserve. Historically I’d say I only used 5% of it toward option plays (and not whole 5% in one position) since I usually was naked and a 100% loss was possible. I haven’t been trading much of anything lately but do you feel your strategies are designed safe enough to utilize 100% of this type of account? I guess what I’m asking is once somebody says yes they are utilizing risk capital would you suggest devote entire sum to these type of plays or should some percentage still be in other growth tactics? Asking because I’m trying to simplify my life at this point, not make it more complicated.-Paul

I am not licensed to give specific advice. But I would think that you should not put 100% of your money into anything. Especially if you are un familiar with it.  What I tell new members is to paper trade for a couple months, then start small. Once they get the hang of the trades and the ups and downs, then they can add more capital to the trades or even do their own trades.

I would suggest the same for you. I use these trades for a large part of my income but I do use other trading strategies as well.

Allen

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