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Showing posts from February, 2023

How should I allocate my money?

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futures, or other derivates trading margin account Margin trading conditions Let's say that I have a $100K account with 20% leverage. This means I have a buying power of 500K (am I right?). The question is if I should risk 50K (50% of my capital) or 250K (50% of my buying power). For example: I sold 10 contracts of SPY 336 put. My platform (IBKR) says that my initial margin is $343 and my maintenance margin is $301. But I know that if I get assigned, I will need to buy $336K worth of SPY... What happens then?... This means I have a buying power of 500K (am I right?). [5] states that 20% leverage allows not more than 5x buying power. (Not Financial Advice) The question is if I should risk 50K (50% of my capital) or 250K (50% of my buying power). It makes sense to use paper trading account at the beginning. But I know that if I get assigned, I will need to buy $336K worth of SPY... What happens then?... - if the put options is ITM(