does the KC calculation have any practical value in calculating optimal position size when trading long option premium ?
When I calculate the KC value using my w-l ratio and profit loss numbers I get .19 Or 20%.
But I would never put this much of a portfolio into one trade buying premium (no matter how good risk management/stops, etc).
What am I missing ? Does it have to do with the number of shares controlled by 1 contract vs the nominal premium ? Thanks