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. On today's daily call, we're going to answer the question – "What metrics should you use for determining your position sizing?" Now, specifically, inside of Thinkorswim, there's a couple of different metrics that they give you. They give you things like option buying power or stock buying power and this maybe the same for your broker too. I'm just again, speaking with Thinkorswim because that's what we're at right now. They also give you cash and sweep vehicles, available funds for trading and then net liquidity or net liq and day trading power. The one that we always use and I think the one that people assume we use… People assume we use available funds for trading and we don't use that. We don't use that because that's what's left over from either investments that you have or money that's tied up in your margin account. If you have let's say a $100,000 account, you might have already committed $50,000, so your available funds for trading is $