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Balanced Allocation

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Trading small accounts can be challenging because we may be tempted to allocate a lot of capital into any one position. However, is there a point where allocating too much becomes dangerous?

  • SPY, 45 DTE, since 2005

  • Sold 25 delta iron condors with $20 wide wings

  • Allocated 20%-80% of a $10,000 account and looked at performance.

We found that before 2008, the largest allocation performed the best. However, after the account was diminished after the downturn, long term performance lagged. Roughly 40% of capital allocated performed the best over the long term.

Get Tom and Tony's take on the results! Check out the segment!

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