Allocation Calculator

Leverage Values

Target and maximum leverage values are what I personally would run. Adjust as you please.

Allocation Equivalents

When you see "Allocation %" discussed in various strategy pages, that is based on 100% allocation = 5x leverage. This is included with leverage numbers in the position table below. NOTE FOR SPREADS: Spread % Allocation in backtests is based on spread width. % Allocation for the calculator below is based on leverage (5x leverage = 100% allocation). This makes for a big difference between what the two figures mean, so keep this in mind.

Buying Power Requirements

For naked positions, buying power required is 20% notional value. 20% for naked can vary drastically depending on broker and market condition. Assuming 20% for your position is much safer than following what your broker actually allows. 20% also aligns with WO's max risk assumption. For spreads, buying power required is spread width.

Portfolio Margin

If portfolio margin is enabled, Total Buying Power will represent the largest buying power requirement between puts and calls. If portfolio margin is disabled, Total Buying Power will be the sum of both put and call buying power.

Spread Widths

Default widths are 500 for puts and 120 for calls. These can be changed on screen.

Mixing Position Types

Naked SPX Only - Only naked SPX positions will be included

Naked SPX & Naked XSP/SPY - This will use naked SPX first and then fill the remaining with naked XSP/SPY to approach your target leverage

SPX Spreads Only - This will use exclusively put and call spreads - best for non-PM accounts and retirement accounts.

Naked SPX Puts & SPX Call Spreads - This will mix only naked SPX puts and SPX call spreads. This is for those who like to leverage calls higher.

Naked XSP Puts & SPX Call Spreads - This will mix only naked XSP puts and SPX call spreads. This is best for smaller accounts that want to include calls.