Option Trading Study Group

This blog is a study group creation plan for OTA trained traders; I have a presentation plan outline for option trading, let call this session/workshop Option trading “study group”.

WHAT: Subject matter is “Options Trading” (26 skills /knowledge areas for option trading listed in here below) 

WHY: Objective: Share and learn Methodologies, mindset, and Math (logic/why) of options trading (kind of brain exchange on options trading)

How: Presentation, online sessions, whiteboards, shared documents, examples, resources and trades. To manage content, we will use this blog as a common repository.  


WHO: Two categories of dedicated OTA traders here:

  1. Producers: who will organize, plan, present, volunteer and share “lesson” plan  
  2. Consumers: will not share (state your reason if you are consumer e.g. ‘shy’,) volunteer or participate actively but consume this resource. I welcome them 

Professional trading combines traditional left-brain skills of theory, logic, math & analytical thinking

Professional trading combines traditional left-brain skills of theory, logic, math & analytical thinking with the intuitive, inductive skills of right brain thinking to find the sweet spot with the Greeks.

Mindset, methodology & math

My 8-step options trading “mindset, methodology & math”

Mindset = 8 steps to think like a CEO,

Methodology = 8 steps to construct a trade.

Math= logic, Greeks, baseline and p/L

Skills required

  • Remain Top of Mind
  • Pich what you know best and explain to others!
  • Learn Something New, teach something you know
  • This is brain exchange list
  1. Trading Mentality (This presentation itself) mindset this topic i.e. step # 2 mindset)​
  2. Basic options, futures and trading terms (margin, vocabulary, work flow)​
    • Account management: →Margin Requirements ​
  1. Equity, forex and Future Options (FOP)​
  2. Option Underline: Option Chain analysis on TWS platform: Symbol (strikes, IV, Greeks,) ​
  3. Option Position: Option profile analysis on TWS platform: Position (P/L, graph, Probability, Return/risk RRR, BEP, Margin impact, EM scenarios)​
  4. Expiration and Settlement” Future expiration and Option on future, assignment, FUT vs OPT expiry dates ​
  5. Expected Move:  ​
  6. Probabilities ​
  7. GREEKS​:
    • Theta decay (Time Decay) Greeks​
    • Gamma Risk (Greeks)​
    • Implied volatility IV (Greeks)
    •  ​
  1. Option Skew ​
  2. Buy Versus Sell ​
  3. How To Sell ​
  4. Equity Versus Futures ​
  5. Strategies (toolkit)​
    • Neutral Strategies (strategies toolkit)​
    • Direction Versus Neutral Trades (strategies toolkit)​
  1. What Cycle to Trade ​
  2. Stop Loss (setup)​
  3. Risk Per Trade (account management, setup, budget)​
  4. Managing Position (set up, post trade management)​
  5. Adjustments (set up)​
  6. Technical Analysis (TLS aka ‘core strategy’)​
  7. Correlations (watchlist, filtering) ​
  8. Diversification (portfolio) ​
  9. Market Conditions (macro, micro, baseline) ​
  10. What To Do After Loss (drawdown, risk, 3R (RRR) rule)​
  11. Trading Checklist /OE​
  12. Portfolio management and deployment

Thanks for supporting this effort. We (you and me) just want to share and grow, embrace best practices.

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