Houston TX
Legendary Market Wizard
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Platform: TT and Stellar
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Leverage and positioning sizing are two very different things.
First question is would you really want to buy $25k of each of the four stocks. If the 4 stocks were Tesla (TSLA), Advance Micro Devices (AMD), Walmart (WMT) and Colgate-Palmolive (CL) would you want equal weightings of each? One of those four is explosive, one fairly volatile and two rather mundane in comparison. Maybe you want something more volatility balanced like $5k worth of TSLA, $10K of AMD, $40k of WMT and $45k of CL?
In terms of the option question, it would depend what you wanted size equally. Obvious things to size would be delta but that would run into the same problem as above. So maybe you equally weight volatility adjusted delta's. You could also size the premiums equally. The fact that TSLA is so much more volatile the WMT would be reflected in the option price and would probably yield similar results (as long as you are looking at similar options).
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