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Good points here. But a 10k account with allocation issues (7% for 1 contract/14% for two...) will not reflect the performance of a 50k or 100k account. With a larger size account you have no problem of allocation above/bellow 10%... I think the actual formula is fair as you can extrapolate for bigger account. For the VIX trade, Kim have made a good post mosterm analysis. This trade is an horrible one. The mistakes are obvious, especially the stop one. Even with a 50% loss you must exit if your stop loss was at 30%. The 20% extra loss are a sort of "slippage"... A stop is in place to protect capital... The only suggestion i could make to Kim: In your trade discussion or in the alert, maybe you could indicate a hard stop level. Above this loss, any member should try to salvage the trade. I know this can be brutal and cause some additional loss because some trades could recover. But i don't see other solution to protect capital from disaster. The stop should be large enough to be triggered only a few time per year but could avoid massive loss... By this way you can be sure that members will not miss the information, as the "catastrophic" stop level is known before entering the trade. And if a trade is stopped, we can make the roll after market condition are going better. Without any pressure because expiration or unrealised loss to recover... SO members should never forget that a roll is nothing more than a new trade and should be treated like an independant trade. I hate the "rolling sensation" as you invest more money to a looser who should have been cut earlier. It can give the sensation that you can alway recover a loss wich is not true. And because the first trade make your judgement biaised you will probably miss the proper exit on the roll as you have a "loss to recover". For the VIX Trade, let's say that prefined stop loss is 30%. The market dropped super fast and members exited with a 50% loss. Let's say 500$ per 10k account for this trade. As we are out of market, we could have done the "roll" with vix at 12/13. Probably something like a 13/18/23 butterfly. The new butterfly would have give us some nice gain with the VIX spike to 17. As we ARE NOT in the same trade, we have nothing to recover, no pressure. And we could probably have recovered our initial loss. Maybe with a final profit, maybe not. But we are not blocked in a bad trade. In this scenario we had two trade. A stopped one (-50%) and a good gain (+30 % ?). My two cents... .

Today is Friday September 6, 2013 and I am rolling the position: SPY is at 166.87 BTC Sep 13 Put 165 @ STO Sep 20 Put 168 @ Net Credit of 2.21