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Building Options Strategies

The Strategy Builder is your command center for constructing complex options positions. This guide will teach you how to build, modify, and optimize your strategies.

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Understanding the Strategy Builder

The Strategy Builder displays a unified options chain that shows calls and puts side-by-side with real-time bid/ask prices, volume, and open interest data.
Each options contract represents 100 shares of the underlying stock. When you buy 1 call contract at 2.50,you′repaying2.50, you're paying 250 ($2.50 × 100).

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Building Your First Strategy

1

Enter a Ticker Symbol

Type a valid stock ticker (e.g., SPY, AAPL, TSLA) in the search box. The platform will fetch live market data and populate the options chain.
2

Select an Expiration Date

Use the expiration dropdown to choose your target date. The platform displays all available expiration dates from the market.
Shorter expirations (0-30 DTE) experience faster theta decay. Longer expirations (60+ DTE) give you more time for your thesis to play out.
3

Add Option Legs

Click on bid or ask prices to add positions:
  • Green BID button = Sell the option (collect premium)
  • Red ASK button = Buy the option (pay premium)
The strategy builder shows 10 strikes closest to the current spot price.
4

Add Stock Positions (Optional)

Use the “+100 Acciones (Covered)” or “-100 Acciones (Short)” buttons to add underlying stock positions for covered calls, protective puts, or synthetic positions.

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Iron Condor (Neutral Strategy)

An iron condor profits from low volatility and time decay. Here’s how to build one:
Step-by-step:
  1. Sell OTM Put (e.g., -1 contract at $95 strike)
  2. Buy Further OTM Put (e.g., +1 contract at $90 strike)
  3. Sell OTM Call (e.g., -1 contract at $105 strike)
  4. Buy Further OTM Call (e.g., +1 contract at $110 strike)
Characteristics:
  • Collects net premium (credit spread)
  • Profits if price stays between short strikes
  • Limited risk (width of spreads minus credit)
  • Positive theta (earns from time decay)
Best for: Low volatility environments, range-bound stocks

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Vertical Spread (Directional Strategy)

Step-by-step:
  1. Buy ATM or ITM Call (e.g., +1 contract at $100 strike)
  2. Sell Higher Strike Call (e.g., -1 contract at $105 strike)
Characteristics:
  • Pays net debit (lower cost than naked call)
  • Profits if price rises to short strike
  • Limited risk (debit paid)
  • Defined max profit (strike difference minus debit)
Best for: Moderately bullish outlook with defined risk

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Straddle (High Volatility Strategy)

Step-by-step:
  1. Buy ATM Call (e.g., +1 contract at $100 strike)
  2. Buy ATM Put (e.g., +1 contract at $100 strike, same expiration)
Characteristics:
  • Pays high net debit (buying two options)
  • Profits from large moves in either direction
  • High theta decay (negative theta)
  • Needs large move to overcome premium paid
Best for: Before earnings, expecting volatility spike

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Reading the Options Chain

The unified chain displays critical information for each strike: 
CALL BID | CALL ASK | V/OI | STRIKE | V/OI | PUT BID | PUT ASK
  2.50   |   2.55   | 120  |   100  |  85  |   1.80  |  1.85
                      450
Volume (V): Contracts traded today - indicates current activity
Open Interest (OI): Total open contracts - indicates liquidity
Avoid options with low volume and open interest. They have wide bid-ask spreads and are difficult to exit. Look for Volume > 50 and OI > 100 as minimum liquidity thresholds.

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Managing Your Position

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Removing Legs

Click the × button next to any active position to remove it from your strategy.

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Modifying Quantities

Currently, each leg defaults to 1 contract. To scale positions:
  • Add the same leg multiple times, or
  • Build the base strategy and scale after analysis

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Adjusting Expiration

Change the expiration dropdown to view different dated contracts. This is useful for:
  • Calendar spreads (buy longer expiration, sell shorter expiration)
  • Diagonal spreads (different strikes AND expirations)
  • Finding better pricing or liquidity

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Understanding Premium Flow

The platform calculates your Net Premium:
  • Credit (Positive): You collected more than you paid
    Example: Sell puts for 500,buyputsfor500, buy puts for 300 = +$200 credit
  • Debit (Negative): You paid more than you collected
    Example: Buy calls for 400,sellcallsfor400, sell calls for 150 = -$250 debit
Credit strategies generally benefit from time decay (positive theta). Debit strategies pay for directional exposure and fight theta decay.

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Pro Tips for Strategy Building

Always prioritize liquid options:
  • Major ETFs (SPY, QQQ, IWM) have the best liquidity
  • Large-cap stocks (AAPL, MSFT, TSLA) have good liquidity
  • Small-cap stocks often have illiquid options
Rule of thumb: Bid-ask spread should be < 10% of the option price

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Common Mistakes to Avoid

  1. Ignoring Liquidity: Trading illiquid options costs you money on entry and exit
  2. Buying Too Close to Expiration: Theta decay accelerates in the final week
  3. Overleveraging: Options can go to zero - size appropriately
  4. Ignoring IV Rank: Don’t buy expensive options (high IV) or sell cheap options (low IV)
  5. No Exit Plan: Know your profit target and stop loss before entering

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Next Steps

Once you’ve built your strategy:
  1. Review the Payoff Simulator to visualize profit/loss scenarios
  2. Analyze Greeks to understand your risk exposure
  3. Get an AI Analysis for strategy validation
  4. Implement proper Risk Management rules
Start with simple strategies (single vertical spreads) before progressing to complex multi-leg positions (iron condors, butterflies). Master the basics first.

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