🚨 I’ll be live at 2:30 p.m. ET with Geof Smith🚨
We’ll play 1DTE Roulette and look for the strongest trending stocks this week for a cheap play expiring Friday [tap to join us for Profit Panel]
I want to share something that fundamentally changed how I think about every trade I make — and it has nothing to do with indicators or secret patterns.
It’s position sizing. Specifically, how many contracts you’re putting on.
Here’s the core idea: With the same dollar risk per trade, it’s often better to buy five contracts at $0.20 than one contract at $1 — even if both setups look equally strong.
That sounds backward at first, but stick with me…
The Problem with Single-Contract Trades
When you only have one contract, the moment the trade moves in your favor, you’re forced into an all-or-nothing decision.
Do you take the profit and cap your upside? Or do you hold and risk giving it all back?
Multiple contracts change that dynamic completely.
You can take partial profits at 30% to 40%, reduce risk and still leave a runner to capture a much larger move. On a recent Carnival Corp. (CCL) trade, I took some contracts off at 40% and let one run to more than 100%.
If you can get back everything you put in on the first couple of contracts, then you can leave the rest on essentially risk-free to capture a BIG move.
That kind of flexibility disappears when you’re locked into a single-contract position.
The reality is it’s simply easier to manage cheaper options with multiple contracts than expensive options where you can only afford one. You can scale out smoothly, lock in gains and still give yourself room to press winners.
Let’s put real numbers on it.
Say your position size is $100 per trade. In some setups, that only allows you to buy one contract — like higher-priced options tied to names such as Iris Energy Ltd. (IREN), where a single contract can consume your entire allocation.
Now compare that with a lower-priced setup like American Airlines Group (AAL), where contracts might be trading around $0.20. If both trades meet your criteria, the cheaper option gives you far more control.
You can scale in, scale out and adjust as the move develops instead of being stuck hoping your timing is perfect.
How This Changes Your Account Over Time
Over time, this approach shifts the math in your favor.
You’re locking in gains while still giving yourself exposure to larger moves. That takes pressure off every decision. You’re no longer staring at every tick wondering whether to bail or hold.
Once you’ve taken partial profits, the remaining contracts are effectively riding on house money.
One of my successful students, Jason, only trades options under $3 for this exact reason — maximizing contract count and flexibility when managing winners.
Your number doesn’t have to be $100. It might be $50, $200 or something else entirely. The principle stays the same: Favor trades that allow you to buy multiple contracts within your risk limits.
This isn’t theory…
It’s how I manage every position, especially in high-beta names where moves can be fast and unforgiving.
If you’ve been stuck in the single-contract trap, this shift may be exactly what your account needs.
👉 Click here to join Profit Panel at 2:30 p.m. ET on weekdays!
To better trading,
Alex Reid
WealthPin
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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