Glossary, quick reference and templates

Chapter 14Fill one in before every order. Write the three signs first, then pick 2–3 candidates from the matrix and choose among them by maximum loss.

STRATEGY SELECTION MATRIX  (write the three signs first, then find a structure)
Underlying: ________  Date: ________
IV / IV Rank: ____ / ____  Days to next event: ____

1. My view (pick one per line)
  Direction:  [ ] Up  [ ] Down  [ ] Flat  [ ] Big move, direction unclear
  Volatility: [ ] Will rise (IV low)  [ ] Will fall (IV high)  [ ] No view
  Time:       [ ] Plays out within 2 weeks  [ ] 1–3 months  [ ] 6 months or more
  Three signs: direction __ / time __ / volatility __

2. Check the matrix (direction × IV environment)
  Bullish + IV low:    long call, bull call spread, LEAPS
  Bullish + IV high:   cash-secured put, bull put spread
  Bearish + IV low:    long put, bear put spread
  Bearish + IV high:   bear call spread; add a collar if you own the stock
  Flat + IV low:       calendar spread (when the back month is cheap)
  Flat + IV high:      iron condor, iron butterfly, butterfly (defined risk first)
  Big move + IV low:   long straddle, long strangle
  Big move + IV high:  usually no trade; sellers are most at risk in a big move

3. Candidate structures
  Candidate 1: ____________  Signs: __/__/__
               Max loss $____  Max profit $____  Breakeven ____
  Candidate 2: ____________  Signs: __/__/__
               Max loss $____  Max profit $____  Breakeven ____
  Candidate 3: ____________  Signs: __/__/__
               Max loss $____  Max profit $____  Breakeven ____

4. Decision
  Chosen: ____________
  Reason (one sentence): ______________________________
  If the view is wrong, where I admit it: ____________

Chapter 13Write it once and review it every 90 days; any change must state its reason. Check it line by line before every order and every addition to a position.

POSITION RULES CARD  (review every 90 days; any change needs a written reason)
Account equity: $________  Effective date: ________

1. Per trade
  Max loss per trade ≤ ___% of the account (1% while practicing, 2% cap)
  Buyers: max loss = premium paid
  Sellers: defined-risk structures only; max loss = width − credit received
  Exit: at ___% of max loss, or ___ days before expiration, whichever comes first

2. Portfolio
  Open positions ≤ ___
  Total max loss of all positions ≤ ___% of the account
  Total beta-weighted Delta ≤ ___ SPY share equivalents
  Portfolio Vega ≤ $____ / point; portfolio Theta ≥ −$____ / day
  Positions tied to the same event (earnings, FOMC, CPI) count as one

3. Stress tests (before every order, and once a week)
  Underlying ±1 and ±2 standard deviations: portfolio loss ≤ ___%
  Underlying −10% and IV +10 points: portfolio loss ≤ ___%

4. Stop rules
  Daily loss ≥ ___%: no new positions for the rest of the day
  Monthly loss ≥ ___% or ___ rule violations: back to paper trading for two weeks
  When you want to “win it back fast”: cut size first, decide the next day

This change and the reason for it: ________________________________

Chapters 14, 15One per trade. Finish the plan section before the order and the review section on the day you close. Be sure to flag the trades that “made money but were done wrong.”

OPTIONS TRADING JOURNAL  No.: ____
Open date: ________  Underlying: ____  Price: ____
IV / IV Rank: ____ / ____  Next event: ________

1. Plan (write before the order)
  View (one sentence): ______________________________
  Three signs: direction __ / time __ / volatility __
  Structure and legs: __________________________________
  Net premium: ____  Max profit: ____
  Max loss: ____  Breakeven: ____
  Delta / Theta / Vega: ____ / ____ / ____
  Account at risk: ___% (rules card cap ___%)
  Take-profit: ________  Stop-loss: ________  Time stop: ________

2. Execution
  Fill price: ____  Mid at the time: ____  Slippage: ____
  Adjustments (date, action, reason):
    ________________________________________

3. Result (write after closing)
  Close date: ________  Close price: ____
  P&L: $____ (____× risk)  Days held: ____
  Change in underlying: ____  Change in IV: ____

4. Review
  Attribution: [ ] Judgment error  [ ] Execution error  [ ] Risk-control error  [ ] Normal variance
  What I did right: __________________________________
  What I did wrong: __________________________________
  Made money but did it wrong?  [ ] Yes  [ ] No
  Next time: __________________________________

Chapters 6, 10Update the dashboard at each day's close, and the events for the next 8 weeks every Sunday. Use a single data source so the numbers are comparable.

EVENT CALENDAR AND IV DASHBOARD  Week: ________  Data source: ________

1. IV dashboard (update at each close)
  Underlying | Price | ATM IV | IV Rank | 30-day expected move | 20-day realized vol | IV − realized
  SPY        |       |        |         |                      |                     |
  QQQ        |       |        |         |                      |                     |
  ____       |       |        |         |                      |                     |
  ____       |       |        |         |                      |                     |
  ____       |       |        |         |                      |                     |
  Expected move = price × IV × √(days / 365)

2. Term structure (once a week)
  Underlying: ____  Front-month IV: ____  Next-month IV: ____
  Forward volatility = √((σ2² × T2 − σ1² × T1) / (T2 − T1)): ____
  Shape: [ ] Contango  [ ] Inverted (reason: ________)

3. Events in the next 8 weeks
  Date | Event | Related underlyings | Implied move | Avg actual move, past 8
  ____ | _____ | ___________________ | ____________ | _______________________
  ____ | _____ | ___________________ | ____________ | _______________________
  ____ | _____ | ___________________ | ____________ | _______________________
  Event types: earnings / FOMC / CPI / jobs / options expiration / other

4. This week's conclusions
  Most expensive IV: ________  Cheapest: ________
  Events worth preparing for: ________
  Positions to cut ahead of time: ________