Options Trading Strategies That Work: Conventional Risk Calculation

PALM BEACH GARDENS, Fla. - Nov. 9, 2015 - PRLog -- Options may seem confusing to some investors, but Weiss Education Services editorial contibutor and options expert, Ron Ianieri, has a powerful yet simple strategy to help investors leverage the power of trading options in the short term.

According to Ianieri, "Options would allow you to do one of two things. You can get a much bigger position with the same amount of money or you can get the same sized position with much LESS money."

He continues, "By using less money to have the same sized position, we enacted a solid risk management plan from the get go.The conventional way to do this (called the Conventional Risk Calculation) is to simply buy the amount of contracts that represents the amount of shares you would buy or sell."

Ianieri adds, "lthough a good way control the SIZE of your position the Conventional Calculation does not necessarily balance your risk in the position. That is where a different calculation can be more applicable. This calculation is a risk based calculation as opposed to the position size based manner that the Conventional Calculation does. It is called Ron’s Risk Calculation or RRC."

Ianieri concludes, "RRC is calculated in a different way with a different concept in mind…….not size but RISK.RRC works extremely well in shorter term trades due to the much smaller amount of money used in the investment and the much higher option prices out over time.it is amazingly effective and offers incredible flexibility allowing traders a gigantic advantage in short term trading over the conventional risk calculation."

To learn more about Ron's Risk Calculation for trading options, read the full article now at http://www.weisseducation.com/how-much-money-should-one-s....

About Weiss Edcuation Services (WES)

WES focused on increasing the financial literacy of individual investors and empowering these investors to understand and control their financial destiny through personal interaction with the best and brightest minds in the industry.

About Ron Ianieri

Ron Ianieri is a contributor for WES and is owner of Ion Options a company he started in 2010. He is also lead instructor at Options Monster Education and editor of the highly successful newsletter “The Income Strategist”. Ron has been trading options for more than 27 years and is also the author of the book “Options Theory and Trading” published by John Wiley and Sons.  Currently Ron travels the world teaching investors the same successful Options class he developed during his years on the trading floor.