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BookingAlpha Option Trading Advisory

Thursday, October 29, 2015

The Crossroad

I started writing on this site more than five years ago, back when us humans were more innocent and believed in trading gurus that promised the moon without revealing long term, honest and transparent track records.

Somehow, the message on this site started to sound contradictory to myself. How to talk about trading transparency, demand it, without being totally transparent yourself? I felt I had to trade and share it,.....for free. Lunacy.

As a result of my self-imposed torture, I'm now close to four years writing about my trades. How boring. I could have spent all those precious hours listening to Justin Bieber's delicious rhythms instead. But, así es la vida.

Why I need your help
All this time I have traded on a real money account. But I contribute to that account with fresh capital periodically. I have withdrawn a couple of times. I play other strategies in the account as well. I also invest. It would just get to messy if I tried to show the exact balance and performance of the options selling activity in particular.

So, from the beginning I decided to use a  $10,000 model portfolio to reflect my Credit Spread trades. It was a round, simple number. Math friendly, easy to calculate performance, position sizes, risk, etc. More importantly, it is a number that reflects the trading capital of many people. Very few traders that are new to the realm of options start with a $100,000 account. So, I thought a $10,000 starting point every year would make readers feel more identified, more connected.

However, my real account, at least the part dedicated to Credit Spreads and Iron Condors is substantially higher than the 10 grand model portfolio. Not 6 figures yet. A tad below 80 grand. Some stuff that I do there, don't really make sense on the small model portfolio shown on this site. A $10,000 model portfolio doesn't allow me to do other interesting stuff. Like hedges, portfolio insurance, speculative long option plays here and there looking to capitalize at market turning points and a lot more. I feel it is time for the content on this site to evolve but I am afraid it may become disconnected with a good part of the audience and potentially new readers who would immediately walk away when seeing a $100,000 model portfolio and assuming this is a site for the 1%ers.

So, help me decide here, and remember, readership may not be important to you but it is vital for the survival of this site. So, perhaps it is the most important factor in the end.

$10,000 portfolio
Pros: Potentially connect to a larger audience. Inspiring.
Cons: Basic trading. Boring repetitive content. Not great value for people with larger accounts.

$100,000 portfolio
Pros: Closer to my real trading capital. More interesting plays and risk management techniques in addition to all I currently do.
Cons: Many readers will not feel identified. Believing they need 6 figures in order to trade, they will simply walk away.

Naturally I have also thought of a sweet spot in the middle: $50,000. The best of both worlds I think. Allows me to do some interesting stuff, while at the same time not be totally disconnected from the majority of readers. A person with a $25,000 - $30,000 account can relate to a $50 grand model portfolio just as a person with 70K - 80K. So, this is the number I would like to use. I think it is the most beneficial going forward as it provides readers with better content while at the same time the site does not get totally disconnected from a good chunk of the potential audience. But it may be my perception. Perhaps $50,000 would be a huge disconnect that I am underestimating.

So, you will help me decide. Let's bring democracy to this site and let the people participate in its destiny.

Below is a poll to collect your vote. It will be open until November 15, just in time before I make my first trade using 2016 options. No personal information is being collected at all. No need for you to give me your Social Number, waist size or your dog's name. All anonymous, just your vote. The more the merrier. Help me decide:

What model portfolio size should we use for 2016?

UPDATE: Poll closed. We're moving forward with the $100,000 model portfolio. For more details about the poll, the results and considerations, read Democracy

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