Options Trading Plan Template

Objectives and Objective:

Goals Generate income and manage risk through strategic options trading strategies.
Goals:
Achieve consistent profitability with an average monthly return of [percentage]
Limit maximum monthly loss to [percentage] of trading capital
Maintain a diverse options portfolio across different strategies.
Strategies 1. Covered Calls:
Sell covered calls on stocks you own to generate income and reduce risk.
2. Protective Puts:
Buy protective puts to hedge against downside risk in your stock portfolio.
3. Vertical Spreads:
Execute vertical spreads (bull/bear put/call spreads) for limited risk directional plays.
4. Iron Condors:
Employ iron condors for range-bound markets, generating premium income.
Risk 1. Position Sizing:
Management Allocate [percentage] of capital for each options trade based on strategy and risk.
2. Maximum Loss:
Set maximum loss limits for each options trade, based on strategy and risk tolerance.
Entry and Exit 1. Strategy Fit:
Criteria Choose options strategies that align with your market outlook and risk tolerance.

2. Timeframe:
Opt for options expiring [months] out to balance time decay and risk exposure.
3. Exit Plan:
Set profit targets and exit strategies for each options trade in advance.
Review and 1. Regular Review:
Adaptation Monitor options positions regularly, adjusting strategies as market conditions change.
2. Earnings Reports:
Be cautious around earnings releases as they can impact options pricing.
3. Strategy Evolution:
Adjust strategies based on performance and evolving market trends.
Emotion 1. Cool-headedness:
Management Stay calm during market fluctuations, making rational decisions based on strategy.

2. Discipline:
Follow the trading plan and avoid impulsive decisions driven by emotions.

3. Confidence:
Trust in your strategy and risk management, regardless of short-term outcomes.

Additional 1. Implied Volatility:

Notes Be aware of implied volatility changes that can affect options pricing.

2. Ongoing Learning:
Continuously educate yourself on options strategies, Greeks, and market dynamics.

3. Mindset:
Cultivate a patient and strategic mindset, recognizing options' complexity and
potential.