This segment explains how to create various portfolios of different sizes in an IRA account, with specific types of trades and how they affect buying power. Everyone trading an IRA account can learn something from this segment.
While there are some traders with an IRA account of $100k and more many have accounts that are much smaller. We previously examined the building of a portfolio for $100K accounts and now we do so for much smaller accounts and explain how to scale them up as the account balance increases.
We used the same basket of underlyings and market data from the last study to test how many positions we could put on in an IRA, We designed portfolio plans for accounts of $5k, $10K and $25K. We used iron condors and iron flies, diagonals, credit and debit spreads and covered calls and cash secured puts. We chose a variety of ETFs and individual stocks. The average IVR was 46 and DTE 45. Both a conservative and an aggressive strategy was built for each account level. The aggressive strategy used 50% of capital and the conservative strategy used 70% due to the higher buying power reduction associated with cash secured puts and covered calls.
The various probability of profit for each strategy and how they compare to each other was discussed. Each portfolio was explained and the number of contracts, capital allocation, Max ROC, Max ROC per day and POP were all listed. The geometric advantage of larger accounts was also explained.
Watch this segment of “Strategies for Your IRA” with Tom Sosnoff and Tony Battista for the takeaways, the actual portfolios, how to scale them and more.
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