Options trading plan

Hey guys, for a while now I’ve been seeing new or inexperienced traders struggle to find the right path to understanding options. At the same time, a huge number of people seem to trade on Robinhood, mostly just betting on direction with 0DTE, with no real risk management, no hedging, no portfolio analysis, no margin understanding, and no fundamental, technical, or quantitative analysis. Basically nothing.

For people who don’t know where to start, but who seriously want to commit to options trading, I would strongly suggest this path:

First, get serious and set clear rules for yourself. In my opinion, don’t trade 0DTE. Forget Robinhood. Use a proper platform like Interactive Brokers. For people in Europe, we don’t have that many choices, and IBKR is by far one of the best for serious traders. Ideally use TWS for active trading, and mobile for monitoring. Thinkorswim and Tastytrade are also worth looking at.

Start by learning the basics, especially the main Greeks and how they change over time. Learn how theta speeds up, when vega starts to weaken, how gamma behaves in the last days before expiration, and how rho matters if you trade longer-dated options. For now, you don’t need things like vanna and charm right away, but learn them later once you really understand the basic Greeks and volatility.

Then start learning volatility trading: IV vs RV, skew, smile, forward vol, and related concepts. In my opinion, that is where the real edge is, much more than trying to guess short-term direction.

Learn as much as you can about portfolio-based options trading. Have a small group of tickers you know very well, from different sectors, and use hedging actively. Up to 10 tickers is enough, and even 5 can be more than enough.

A lot of this can be learned by really studying IBKR TWS, plus reading Natenberg and the last two books from Euan Sinclair.

Learn fundamental analysis. If you trade indexes, learn how to read FOMC, CPI, PMI.. That also helps with stocks. Always try to think one or two steps ahead, over the next 2 weeks to 5 months, because in the very short term you mostly just see noise and the longer term ears your edge. For me, 2w – 5m is the best. Learn how to read earnings properly. Not just “NVDA beat expectations, I’m buying everything,” but look at long-term investment, free cash flow, operating margin, ROIC, the balance sheet, insider behavior etc..

Also study sector rotation. What is growing, what is slowing down, and how geopolitics affects different sectors?

Important is to understand the cost of money. Know where bonds and the US dollar are, what inflation and interest rates are doing. Cheaper money usually helps indexes and tech, while expensive money creates pressure. Learn about repos and swaps too. Go as deep as you can. It’s a broad topic, but extremely important if you want to understand how money flows through markets.

Learn how to use GEX too. It helps more with shorter-term strategies, where the risk is much higher, so read it more from the perspective of what smaller players want, and try to think like a bigger player.

For technical analysis, use things like EMA and VWAP only after you’ve already made the decision based on fundamentals, your broader ideas, and your portfolio structure. Those indicators are for entry timing, not for building the whole thesis.

Microstructure is crazy important. On a demo account, practice opening and closing positions with different strategies so you get a real feel for execution and see how much spreads and gaps actually cost you. The more demo practice, the better.

After that, keep a journal and track your work for a year. When you see that your process is solid and results are consistent, then start with real money.

Good luck guys and REMEMBER: THEY can lie in the short term, but they can’t fake the whole economy over a longer period!