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Forum Guru
 
Group: Administrators
Last Login: 8/25/2010 9:38:53 AM
Posts: 69,
Visits: 35
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| Question: Is it a good idea to have both debit and credit positions on at the same time for diversity? What ratio would you recommend? Steve's Response: Diversification is a good strategy, but using too many options strategies that conflict with each other might not be the preferred method. Using “x” number of debit spreads and “y” number of credit spreads might not give you better results. What you may want to consider is how a certain strategy could react to changing market conditions (price, time, volatility, etc). Similar trading results can be achieved by trading debit or credit vertical spreads depending on your own market viewpoint and given certain risk/reward tradeoffs.
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