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BookingAlpha Option Trading Advisory

Saturday, August 27, 2011

Option's price fluctuation

Options price fluctuations

I always wanted to know the price fluctuations of a specific option on a stock, both intra day and longer terms. This is pretty basic information but for some reason most Brokers' trading stations don't offer that feature (If ThinkOrSwim doesn't I bet most don't offer it either). This might help you...

Saturday, August 6, 2011

The Dynamic position size paradox

In my previous post Risk a percent of your account per trade I talked about money management and capital protection basics, by only risking a fixed percent of your trading capital per single trade, and showed how to adjust your position size in a Forex play to meet this goal regardless of how far or close your stop loss is from the entry.

Given that we adjust the risk at our will by regulating the position size on every trade, we can say we are using a dynamic position size technique. Now let's analyze this interesting occurrence that has more to do with Math than trading but it is something to keep in mind for our game.