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Ilan,

Actually, fees on options trades haven't been killed, merely reduced. What is killing me is spreads, which are wide for the illiquid stuff I was trying to trade and the reason I got out of them when I could. I haven't started thinking about "quality", because there is none. I stumbled through some trades and made money. That's as statistically meaningful as winning two coin flips in a row.

You shouldn't berate yourself for not having bet bigger on your winners. That kind of retrospective woulda/coulda/shouda will get you killed, because any of those trades could have gone south. Linda Raschke --one of the world's top traders-- makes that exact point. "I size all positions equally, because I never know what's going to work and what's going to blow up." She can do that, because she's generally trading SP futures.

With options, it's going to be harder to size positions equally. So two things need to be distinguished: 'exposure' and 'risk'. 'Exposure' is the gross money in the trade. 'Risk' is a conservative estimate of worst-case loss. In order to avoid the risk of ruin, the rule of thumb is 'risk' can't exceed 2% per trade. A lot of the pros work with a much smaller cap.

Aridam
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