Advanced
Sizing option positions from a loss budget
Start with the amount a position could lose, then decide its size. Premium received and broker buying power are different from a personal loss budget.
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Options Trading Guide
Understand calls and puts, analyse option prices and build strategies for direction, income and protection. Follow ten stages from contract basics to advanced structures and disciplined trade management.
Start with Calls and puts from both sides of the contract, then follow the next lesson links. Explore 40 lessons with worked examples, exercises and further reading.
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Risk and Decision Making · All lessons
Risk and Decision Making
Size trades, stress a portfolio and separate probability estimates from evidence.
Advanced
Stress testing Greeks and portfolio concentration
A portfolio of different strategy names can share the same hidden exposure. Reprice the positions together under adverse changes in price, volatility and time.
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Advanced
Probability of profit expectancy and tail losses
A high win rate does not establish a profitable strategy. Combine the size of wins, losses and costs, then examine outcomes beyond the average.
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Advanced
A trading journal that separates process from luck
A journal makes the reasoning behind an option trade reviewable. Keep the initial plan separate from later explanations invented after the result.
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