Paying 50% insurance on profit?

I've recently signed on with a guru who's doing very well in recommending credit spreads.

But he always recommends closing them out at 50% of the profit that would be made at expiration.

OK, that's surely safe, but is there any back-testing data or theory that suggests that routinely giving up 50% of potential profit is in any way optimal?

Are there any platforms that will let me set a stop-loss order based on the current hedge value?

I'm using Schwab and StreetSmartEdge, and AFAIK they don't allow that, so if I wanted to use that criterion I'd have to calculate that throughout the trading day for each of my positions (based on delayed data)

Submitted September 29, 2020 at 07:40PM by bsmdphdjd
via https://ift.tt/349ldP7

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