The Traderszone Network

Published in TZ Latest News 12 July, 2017 by The TZ Newswire Staff

How to evaluate efficient use of capital for each trade?

In order to enhance profitability over time, I’ve been thinking about the factors that go into one’s rate of return. For example, one might sell a straddle for 1.00 premium, but it’s relative juiciness varies since a trade on a 5.00 stock would consume less buying power than a trade on a 20.00 dollar stock. On the other hand, if the duration of the first trade was 5 months and the second 1 month, perhaps they’re somewhat equivalent. So it seems like there are 3 factors here:

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