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

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question – “How do you adjust position sizing when rolling option trades?” I think this is a really great question and this came out of our Facebook community where somebody posted in there and they said, “Kirk, for your small position sizes of 5% or less, how do you account for the positions that moved against you and you’re rolling forward a credit month after month?” For example, they said, “If your 2% position in TLT for January expiration needs to be rolled to February, what if you already have a 2% position in TLT in February at a very different strike price due to a sharp move up or down in the underlying security and now, you’re basically forced to carry this blended position in February of 4%? So, 2% from January that you rolled to February and 2% that was already there kind of existing in place. And so, what if you then needed to roll both the positions forward to March due to