Below are our new portfolio allocation from June 2006 forward (at least until further notice).

Credit Spread - Maximum of 20% of Portfolio or a minimum of 2 contracts for each spread based on Net Liquidating Value

Straight Calls/Puts - Maximum of 2% of portfolio or 1 contract if portfolio is less than $50k based on Net Liquidating Value

The idea of splitting the portfolio is to provide ourselves flexibility in entry and also to prevent a bad trade from wiping a big part of our portfolio.

Unlike in the past, we will have pre-determined exit points/stop loss for every trade. As long as the market touches these points, we will exit regardless if it moves back in our favor. Whenever our exit points are penetrated, we will exit our position at the best possible price.