Options Strategies in Up Down or Sideways Markets

Reminders:

Liquidity – My trades need to be liquid. The underlying stock should trade over 100k shares a day and there should be at least 1000 open interest contracts

IV Percentile – Trade setup based on IV.
Here is a link for High Volatility stocks.

Option Strategy – Choose a strategy below that best fits the stock I am looking at.

Strikes & Month – Stick with 70-90% probability trades.
– high IV strategies between 30-60 days out
– low IV strategies between 60-90 days out

Position Size – trade 1-5% of my account

When To Take Profits

Strategy Target % of Max
Credit / Debit Spread 50%
Straddle25%
Strangle50%
Iron Condor50%
Iron Fly / Butterfly25%
Calendar / Diagonal Spread10 – 25% Indices
25 -50% Stocks and ETF’s
Jade Lizard50%
Naked Calls / Naked PutsSee below
% of Max Days Held
20%2
40%7
50%14
70%26
90%38



High IV Bullish Strategies

IV Rank above 50%

Bull Put Credit Spread – Bullish Outlook & High Volatility

Short Naked Put – Bullish Outlook & High Volatility

Put Broken Wing Butterfly – Bullish Outlook & High Volatility

Custom Naked Put – Bullish Outlook & High Volatility


Low IV Bullish Strategies

IV Rank below 50%

Call Debit Spread – Bullish Outlook & Low Volatility

Call Calendar Spread – Bullish Outlook & Low Volatility

Call (Ratio) Backspread – Bullish Outlook & Low Volatility

Put Diagonal Spread – Bullish Outlook & Low Volatility


High IV Neutral Options Strategies

IV Rank above 50%

Short Straddle – Neutral Outlook & High Volatility

Short Strangle – Neutral Outlook & High Volatility

Short Iron Condor – Neutral Outlook & High Volatility

Short Iron Butterfly – Neutral Outlook & High Volatility

Iron Fly – Neutral Outlook & High Velocity

Jade Lizard – Neutral to Bullish Outlook & High Volatility


Low IV & Neutral?

Don’t make the trade


High IV Bearish

IV Rank above 50%

Call Credit Spread – Bearish Outlook & High Volatility

Short Naked Call – Bearish Outlook & High Volatility

Call Broken Wing Butterfly – Bearish Outlook & High Volatility

Custom Naked Call – Bearish Outlook & High Volatility


Low IV Bearish

IV Rank below 50%

Put Debit Spread – Bearish Outlook & Low Volatility

Put Calendar Spread Bearish Outlook & Low Volatility

Put (Ratio) Backspread – Bearish Outlook & Low Volatility

Call Diagonal Spread -Bearish Outlook & Low Volatility