Concentration vs diversification — how much one idea can own
Short · Risk & sizing · October 7, 2026
Olympia publishes educational content for learning purposes only. Past performance is not indicative of future results. Nothing here is investment advice.
Concentration is how much of the book one idea gets to own; diversification spreads it so no single idea can take you out. $2,000 in one name out of $25,000 is 8% of the account. Enough of one idea to matter, never enough to end the fight.
Part of the full lesson: How much should I risk across all my trades? Portfolio heat
The lesson in writing
You put all your money on one name — your whole account. One bad fight night and it's over; game's over.
What it is
Concentration is how much of a bad idea gets to own your whole book. Diversification spreads it, so no single idea can take you out of the fight.
Too thin and your best idea barely moves the needle. Too concentrated and one miss takes out the year. Enough of one idea to matter, never enough to take you out of the fight or off the trading floor.
How it's worked out
Figure it as that position over the whole book. If you have $2,000 in one name out of $25,000, that's 8% of your account.
Where Olympia calculates it
In the window, Olympia caps every name it suggests from your book: 8% on a steady pace, 12 on balanced, 18 on full. And it aims to spread what it suggests across at least three names.
How the size inside that cap is picked is in How much should I risk across all my trades? Portfolio heat.
Example numbers, not a member's: $2,000 in one name out of a $25,000 account. The per-name caps are the window's own settings.
