Options

Options — strategy framework

A framework for thinking about and constructing option positions. Based on McMillan's Options as a Strategic Investment (5e), Natenberg's Option Volatility & Pricing, and a handful of practitioner sources cited in the reference files.

Scope

This skill is the strategy layer:

• Which structure fits which view (direction × magnitude × volatility × time)
• How to size and stop
• How to read Greeks
• When to roll / close / let expire
• Common spread mechanics and break-evens
• Predictive indicators (put-call ratio, VIX, skew)

For live option data (chains, strikes, Greeks via IB) — use the ib-connector skill. Don't duplicate that logic here.

Workflow

When the user brings an options question:

1. Identify what they're actually asking. Strategy selection?

Risk/sizing? Greek interpretation? Roll decision? Assignment handling? Each goes to a different reference.

1. Check regime — implied vol level (vs realized, vs history),

skew direction, term structure. A sell-premium thesis only works in one regime; a buy-vol thesis only in another. (Pull realized vol from the underlying's price history; compare to current IV before committing.)

1. Pick structure with explicit reasoning about max gain / max loss /

break-even / margin requirement / commission drag.

1. Size by Kelly fraction × your conviction tier, not by max-loss

tolerance. See references/formulas-and-spreads.md (Kelly section).

1. Pre-mortem: what does the position look like at -50% of remaining

credit? At +50%? At 21 DTE? What's the assignment risk if assigned tonight? Don't enter without answers.

When to consult which reference

| User is asking about | Open this reference | |---|---| | Margin, assignment, roll mechanics, McMillan's 10 rules | [references/execution-and-philosophy.md](references/execution-and-philosophy.md) | | Intrinsic/extrinsic, break-even formulas, Kelly sizing, intermarket spreads, collar tables | [references/formulas-and-spreads.md](references/formulas-and-spreads.md) | | Put-call ratio, VIX interpretation, seasonal patterns, term-structure reading | [references/predictive-indicators.md](references/predictive-indicators.md) | | Breadth oscillator, TICKI, post-expiration reversal, systematic entry signals | [references/trading-systems.md](references/trading-systems.md) |

Always pull the right reference into context before committing to a recommendation. Don't reason from memory — the reference files have the exact formulas and rules.

Hard rules

• Never recommend opening a position without naming all four: max gain,

max loss, break-even, capital at risk. If you can't compute them, you don't understand the structure well enough to recommend it.

• Always check assignment risk for short options ≤ 21 DTE, especially

short calls on dividend-paying underlyings before ex-div.

• Multi-leg orders are not single-fill atomic in CP Gateway. This plugin

is read-only and does NOT place orders (the block-orders.sh hook blocks it), but if the user asks "should I leg into this in TWS?" — McMillan's guidance is in references/execution-and-philosophy.md.

• Implied vol mean-reverts; realized vol clusters. A sell-premium

thesis assumes you're paid for vol > realized. Pull the actual realized vol (~21d annualized) before assuming IV > RV.

What this skill does NOT cover

• Raw IB API option-chain fetching → use ib-connector skill
• IRS wash-sale rule on options → use tax-loss-harvest skill
• Whether to even hold options as part of your overall portfolio

strategy — out of scope for this skill (a separate reasoning-layer skill, if installed, would handle that)

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: oh-rid
• Source: oh-rid/claude-code-plugin-ib
• License: MIT

Install and usage instructions live in the source repository linked above.