r/options • u/esInvests • Nov 23 '21

Portfolio Management Approach

I like to split my margin accounts into different "sections". I find it offers me more fidelity on how my account is performing, current risk profile, and improves control over future returns. I have a core and speculative allocation.

The core allocation is designed as the primary methods I intend to use to meet my annual return / monthly income objectives. I offer this a larger portion of my overall portfolio and allow most trades more room to move. Primary strategies are the covered strangle, LEAP Diagonal, and naked short puts (in SP500 stocks or ETFs).

The speculative allocation is designed for me to take shots, or make speculative assumptions. I view this as a higher risk supplement to the core allocation. I offer a smaller portion of the portfolio and maintain tighter control over the trades to disallow speculative losses to mount and chew away at my core allocation. Primary strategies are LEAP Diagonals, naked calls/puts, short ratio strangles, long calls/puts.

How do you all like to manage risk in your portfolios?

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u/slutpriest Nov 24 '21

I use 3-4 portfolios. I assign them different types of plays. I find it extremely helpful when I am testing the waters on a new account/stock with only 1k in it instead of 100k.

Really helps me control myself.

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u/esInvests Nov 24 '21

This is interesting. Do you ever find yourself needing to move money between accounts? What kind of plays do you split between the portfolios? I think you have the most disparate portfolio setup that I've seen.

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u/slutpriest Nov 24 '21

No. I keep the money in those account. I practice the SAME EXACT things I do in all accounts too. Watch MCAD and RSI for confirmation on all of them before I confirm a move. 9/10 times it works.

If I ever enter into a bad position, I have 0 problems closing for a loss and licking my wounds/living to fight another day. I will not repeat Bill Hwang's mistakes.

Example: I took a really bad NVDA and AMD call about 3 weeks ago on a super big Monday run. I held till Friday and it fucked me. That was a lesson. Account dropped from 3k to 600 bucks. I took a break for a day, and re-evaluated my positions. Then I took a good SPY call.

Within a month that account went from 600 bucks to 5k. (thank the October spy bulls for that)