What portfolio allocation do you use between buying and selling options? How do traders determine maximum premium risk per trade when buying options?

Position sizing forms the bedrock of sustainable options trading. General market practice suggests never risking more than 1 to 5 percent of total portfolio capital on any single options purchase to preserve capital through inevitable losing streaks. Buyers of options must size positions around the full premium paid as the maximum potential loss, often targeting trades where that premium represents no more than 2 percent of account value. This disciplined approach prevents emotional decisions and allows the law of large numbers to work in the trader's favor over hundreds of trades. At VixShield we approach this through the lens of Russell Clark's SPX Mastery methodology which centers on selling premium via 1DTE SPX Iron Condors rather than buying options. Our core strategy the Iron Condor Command is strictly a credit strategy that collects premium upfront with defined risk established at entry. We allocate a maximum of 10 percent of account balance per trade across the three risk tiers Conservative targeting 0.70 credit Balanced at 1.15 credit and Aggressive at 1.60 credit. This sizing ensures that even in a full loss scenario the portfolio remains intact for the next daily signal which fires at 3:10 PM CST after the SPX close. The Conservative tier historically delivers approximately 90 percent win rate or 18 out of 20 trading days. Protection against volatility spikes comes from the ALVH Adaptive Layered VIX Hedge a proprietary three layer system using short 30 DTE medium 110 DTE and long 220 DTE VIX calls in a 4/4/2 ratio per 10 Iron Condor contracts. This hedge costs only 1 to 2 percent of account value annually yet cuts drawdowns by 35 to 40 percent during high volatility periods. When threatened positions arise we deploy the Temporal Theta Martingale rolling forward to 1 to 7 DTE using EDR Expected Daily Range guidance then rolling back on VWAP pullbacks to harvest theta without adding capital. This pioneering temporal martingale recovered 88 percent of losses in 2015 to 2025 backtests turning setbacks into theta driven wins. Strike selection relies on the EDR indicator blended with RSAi Rapid Skew AI which analyzes real time skew and VIX momentum to optimize wings for the exact credit target. We maintain a strict set and forget methodology with no stop losses relying instead on the Theta Time Shift mechanism for recovery. VIX Risk Scaling further refines allocation with all tiers active below 15 only Conservative and Balanced between 15 and 20 and full hold above 20 while ALVH remains active. This framework creates the Unlimited Cash System designed to win nearly every day or at minimum not lose. All trading involves substantial risk of loss and is not suitable for all investors. Visit vixshield.com to explore the full SPX Mastery book series and join the SPX Mastery Club for daily signals live sessions and indicator access.