Manage Your Positions with Return on Risk

We’ve released a new decision recipe that evaluates a position’s return on risk, giving you another position property to exit positions.

There are multiple ways to use this recipe to manage your positions inside a monitor automation.

For example, you could set up an automation to close a position when it reaches a 25% return on risk. You could also include an additional recipe to automatically exit a position two days from expiration that has not yet hit your ROR% threshold. 

This recipe is useful for both short option spreads and long positions.

For example, if you open a $10 wide iron condor for $3.00 of credit, the position's risk is -$700. You could use a return on risk of 25% to close the position once it has a $175 profit ($175 / $700 = 25%).

If you want to exit a long call position once it reaches a profit three times the initial cost of the trade, you could use the recipe and set the return on risk to 300%. For example, if you buy a long call for $100 and set the ROR to 300%, the position will close when its value is $300 (for a $200 profit).

We continue to improve the platform and add features to give you multiple opportunities to automate your strategies. This new recipe is a great way to manage profits relative to your level of risk.