Trade inputs
Ticker
Stock price ($)
Current IV % (from TOS options chain)
- Open TOS → Trade tab → Options chain → Implied Volatility column
52-week high IV %
- TOS → Options chain → look for highest IV over past year (or use 80 as default estimate)
52-week low IV %
- Use 15 as a safe default if unknown
Open interest on target strike
- TOS options chain → OI column at your ATM or 1-ITM strike
Bid/Ask spread ($)
- Ask minus Bid at your target strike. Under $0.15 = acceptable.
Planned expiration (DTE)
- Days to expiration. Use 30-45 DTE for standard swing trades.
Your planned hold time
- Select hold time
- 2-5 days
- 5-15 days
- 15-20 days
Run Checklist → Clear all fields
Checklist results
○ Fill in inputs to run the checklist
- Enter stock price, IV, open interest, spread, DTE, and hold time on the left. The checklist will evaluate all 6 criteria and give you a verdict.
Strike selection by stock price
| Stock price | Buy this strike | Never buy |
|---|---|---|
| $4.00–$6.00 | $5 call (ATM) | $6 or $7 call |
| $6.00–$8.00 | $7 call (ATM/1 ITM) | $8 or $9 call |
| $8.00–$10.00 | $9 or $10 call | $11+ call |
| $10.00–$12.00 | $10 or $11 call | $13+ call |
| Rule | Never go more than $1 OTM on stocks under $10 |
Expiration by hold time
| Hold time | Buy this DTE | Status |
|---|---|---|
| 2–5 days | 21–30 DTE | OK |
| 5–15 days | 30–45 DTE | Ideal |
| 15–20 days | 45–60 DTE | OK |
| Same week | Weekly options | Never |
| Under 7 DTE | Any | Exit now |
IV Rank guide
| IVR | Premium cost | Action |
|---|---|---|
| 0–20 | Very cheap | Buy calls |
| 20–30 | Affordable | Buy calls |
| 30–50 | Moderate | Reduce size |
| 50–70 | Expensive | Stock preferred |
| 70+ | IV crush risk | Stock only |
Position sizing at 100 shares
| Premium cost | Contracts | Total risk |
|---|---|---|
| Under $80 | 1–2 | $80–$160 ✓ |
| $80–$150 | 1 | $80–$150 ✓ |
| $150–$250 | 1 (half) | $150–$250 ⚠ |
| Over $250 | 0 — skip options | Buy stock instead |
| Stop loss | Exit when option loses 40–50% of value |