The System Is Scaled according to the Capital Available
This basic system is designed with the small investor in mind. All examples that we use assume an account with a capital allocation of $5,000.
The amount of capital that you have will determine the width of the vertical call spread. With $5,000 or more available you will use a 10-point spread. With a 10-point vertical call spread on the SPY we will be putting at risk about $500 to $600 per unit. The basic unit will be described later in detail. If you have less than $5,000 use the following for the amount of capital that you have available. As your capital grows increase the point spread accordingly.
Capital Available |
Spread |
$5,000 |
10 points |
$4,500 |
9 points ... |
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