The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again and welcome back to the daily call. Today, we are going to be answering the question, “Should you manage individual option trades or combine positions in a particular ticker?” Let me just back up and tell you the basis of where this question comes from. If you are getting into laddered entries like we talked about just a couple of days ago in one of the shows here on the daily call, if you’re getting into laddered entries and you’re starting to enter multiple positions in the same ticker, the question is, “Do you manage each of those individual positions one by one or do you manage them together as a combined community?” Let's say you got into position in SPY. Your first position, you took in potential credit of $100. The second position, you took in $120. Now, do you add those two things together and say, “Okay. Now, the combined credit is $220 and I want to take 50% of that.” Or do you take 50% of the first position and 50% of the last. Well, ultimately, it’s your decision, but