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Tackle Today: Risk is Relative

January 9, 2019

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≈ Master this Holy Trinity of Trading. ≈

“This is why I love the covered call. For the longest time, I refused to trade it because I thought it was boring and pointless. […] It’s now my favorite system. It’s changed how I think about trading and my portfolio design. If you lose on the call, you win on the stock […]. But just in case the stock went to sleep, you at least made money on the call. Same thing with the condors. If you lose on the condors, you should have made money on directional trades. […] In fact, my best months are the ones where my condor loses. […]”

This is our #TeamTackle member Justin Driskell over at the Clubhouse.

Risk is a relative measure. It’s not that risk is in the eye of the beholder, we’re talking Portfolio Design here. A well-balanced portfolio can make this seven-headed beast look like a teddy bear.

_ Condors are risky. It depends. A portfolio that is 100% composed of Condors is one thing. A 20% allocation on Condors balanced with other non-range bound cash flow strategies and also delta strategies is completely different.
_ Cryptocurrencies are risky. It depends. A portfolio that is 30% composed of Cryptos is one thing. Another thing entirely different is allocating 1% on them just as an explosive directional bet.

Balance is the key to success in this trading business. And balance is a synonym for Portfolio Design.

Portfolio Design, Position Sizing, and Risk-Reward. Master this Holy Trinity of Trading and you shall succeed.


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The Holy Trinity of Trading


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What is a Covered Call

A covered call is a combination strategy in which the trader buys stock in increments of +100 shares and then sells -1 call option contract for each 100 shares of stock.


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2 Replies to “Tackle Today: Risk is Relative”

  1. JustinDriskell JustinDriskell says:

    I’m being quoted now. I feel famous. lol. Thanks Christian 🙂

    1. Yes, you are, my friend. My pleasure.

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