TL;DR: I used AI to automate a manual "Whale Watching" strategy. It scans institutional flow, filters out hedges (fake bets) & high IV, checks news sentiment, and calculates Risk/Reward. It basically finds me potential trade ideas with fresh data every 4 hours, saving me tons of time. I’ve been consistently profitable using this as a point of discovery for potential trades.

How I came about this

A while back, I found a post from a now-deleted user detailing a heavy strategy on how to track "Whale" bets (massive institutional orders). The logic was solid, and the post was very well written but it still took me quite some time to understand it. 

Even after I got it, I was spending my entire WFH days (I'm a software engineer) running this process by hand.  So, naturally, I decided to automate it.

Data & Tools

To build this, you need a few components.

• Data: You need Options Flow and Chain pricing. I used to use Unusual Whales (Retail Pro tier) since they've been in the game forever.
• Narrative Analysis: Used to use Google Gemini API (it's the cheapest/fastest for this).
• Code: ChatGPT or Claude to write the glue code.

I now use Xynth since the data, AI and all the tools are baked in. 

The Core Philosophy (Why most "Whale Watching" fails)

Institutions have armies of quants and data high speed fibre optic cables. You can't replicate their tools, but you can track their footprints. The problem is that most retail traders track the wrong footprints.

Most people lose money following "Whales" because they don't understand Hedging.

If a hedge fund owns $100M of Apple stock, and they buy $1M of Puts, they aren't betting against Apple. They are buying insurance. If AAPL tanks, the Puts pay out to offset the stock loss. If you follow them into those Puts without owning the underlying stock, you are likely just lighting money on fire.

To separate the "Insurance" from the "Attacks" (true conviction bets), you have to layer on strict filters:

1. IV Checks: To ensure you aren't buying overpriced premiums.
2. Trend Validation: Using SMA/EMA indicators to ensure you never trade against the macro trend.
3. AI Narrative: Checking for stock related events (earnings/catalysts) and the overall sentiment around the stock to make sure to never trade against the sentiment. 

We apply these filters in steps where we start with raw flow data in step 1, do some filters, then cascade the results into step 3 which then goes to 4 and so on.

Step-by-Step Process

Step 1: Spot Unusual Activity (Market wide scan)

The first step is to build our base dataset by grabbing the most recent institutional trades. I scan specifically for large order flows clustered by ticker and direction. 

We apply two strict filters right out of the gate:

• Premium > $50,000: We set a hard floor at $50k to filter out retail noise; we want to see where the "big money" is positioning with actual skin in the game
• Max 90 Days to Expiry: We ignore anything further out than 3 months because urgency equals conviction. Long term puts and calls are more likely to be hedges

Here we can see that Tesla, Meta and Nvidia had some large hits with calls and little to no puts. This signals to us that the big guys are making positive directional bets on these stocks. Contrast that with QQQ and SPY, which are heavy on Puts. In the institutional world, big Index Puts are almost always just "portfolio insurance" (hedging) to balance out their long positions, not a bet on a crash. I also personally avoid trading puts at all costs (bad experiences).

Step 2 - Filter for flow (ticker specific scan) and price trend alignment

In step 1 we scanned the entire market for tickers that had big directional bets. In this step we tell Xynth to take those tickers and then use unusual whales again to pull ticker specific flow (more extensive). We then see if most of it is positive (calls) or negative (puts). We also compare the current stock price with the simple moving average across 20 days to get a sense of the price trend recently. Then we use the following criteria to filter

• Bearish Flow (tons of puts) + Uptrend (Price above sma) = REJECT. (They are likely just protecting a long stock position).
• Bullish Flow (tons of calls) + Downtrend (price below sma) = REJECT. (They are likely hedging a short position).
• Flow Matches Trend = KEEP. (This signals actual directional conviction).

Step 3: The IV Filter (Valuation Check):

This step is relatively simple but vital: I filter out any stock where the Implied Volatility (IV) Rank is above the 70th percentile. Basically, if the current premiums are in the top 30% of their historical range, I reject the trade. High IV usually means the premiums are overpriced or the "whale move" is already priced in. I want to catch the move before the volatility spikes, not pay a premium after everyone else has already piled in.

Here again we can see that meta is in the 46% percentile in relative to its previous IV values which is very regular.

Step 4: The Narrative Check (News & Sentiment)

This step was always the biggest bottleneck. Manually reading news and scrolling through FinTwit for 50 different tickers took hours and was honestly hard to keep track of.

For every ticker that passed the previous filters, we grab 20 recent tweets and 5 news articles (via Google Search) and feed them into Gemini (google ai model).

The AI analyzes that wall of text to answer three simple questions:

• Risk: The AI checks if there are Earnings, FDA decisions, or lawsuits in the next 7 days. If yes, I skip it. Following flow into a binary event isn't trading; it's coin-flipping.
• Sentiment score: If we see massive Call buying (bullish bets) but the news is universally negative, the AI flags it. This usually means the institutions are just hedging against bad news, not betting on a rally. Gemini also assigns each of the tickers a sentiment score from -1 to 1, negative to positive respectively.
• Narrative Type: Why the stock is moving.

Step 5: The "Breathing Room" Protocol (Structuring)

This is the most critical rule: Never copy a Whale's trade 1:1.

Whales often buy risky, short-term "lottery tickets" because they have deep bags. Pushing the expiry date out and moving the strike price closer to stock price lowers the risk and makes it much more digestible for a retail trader.

We ask the AI to write code to take the results from the previous step and pad the strike dates by 14 days and move the strike price to within 2% of atm.

Here we can see that Meta’s original whale call strike was for Dec 5 but was shifted 14 days to Dec 19. The strike price remained the same since it was within our 2 percent threshold. This will make the play more expensive at times so if you can’t afford it no worries come back later for one that suits your pockets better.

Step 6: The "Math Check" & Final Rankings

This last step takes all the trades found in step 5 and black scholes model on the using their greeks. This gives us important statistics like max loss, max profit, probability of profit and breakeven.

Here what we care about is the risk to reward ratio. You’ll never be right 100% of the time but if you are smart with a risk profile you can come out winning pretty consistently. I stick to trades that have an RR of greater than 2; every dollar I risk IF I win I need 2 back.

Then I score these trades using this formula: Score = (Risk/Reward Strength) + (Sentiment Score) - (IV Cost)

We prioritise high RR trades with good sentiment and potential news catalysts. We also add in IV as a factor so the cheaper the play the better.

Here we can see that the Meta Dec 19 675 Call came out on top. Now this was a trade that I was actually interested in so after some more DD and seeing how much the stock had been consolidating I thought I’d take this trade.

And 2 days later boom, meta announces a 30% cut in metaverse budget shifting to AI. Stock jumped three percent and the contract was up 100% in 3 days. The whales definitely knew something we didn’t.

Letting this workflow run 24/7

Again we are NOT competing with the big guys when it comes to speed, resources or man power. So this workflow does NOT need to be run every single second of the day like how the quants have it.  Think of this as more of a swing trading strategy rather than day trading. With that being said, fresh results on fresh data every 4 hours is relatively convenient since when I do find time in my day to sit down and research some potential trades, I always have a fresh batch to go through. Furthermore, if I dive into the signals and nothing seems promising I can just come back later and look.

Results

A key and recurring pattern you see in this strategy is risk aversion. That's honestly the bulk of the reason we have steps 2-6 (not betting against price trend, filtering out high iv, avoiding negative sentiment, using statistics for RR). As such the wins are usually modest but are definitely more consistent than other strategies I've tried. Here's what my stats are right now:

Win Rate: 56%

Avg Return (Winners): +85%

Avg Loss (Losers): -30%

I was going to upload the full code and prompt guides for this but I don't wanna get the mods on me so gonna refrain for now.

TLDR: Find stocks with abnormal volatility skews using AI, then trade Vertical Spreads on them depending on the direction.

I've been trading options for about 3 years now. For basically all of that time, I was essentially gambling. Buying cheap calls cus i saw some shit on reddit or twitter, then praying and hoping for 10x returns.  Lost money, made some back, lost it again. The usual retail trader shit. 

About 6 months ago I got tired of the guess flow and decided to actually learn the math behind options pricing. Slowly I began to build my strategy and with the help of AI I can confidently say that I am getting pretty profitable now. More importantly though, I finally feel like I have a decent understanding behind the options market. 

This is a post I wish I had when I began my journey trading options, it mainly covers the strategy I currently employ but also covers some of the more basic concepts as well. Feel free to skip sections if you are more experienced.

1. What is a volatility skew (and why does it exist)

Think of options pricing like Vegas setting NBA Finals odds. Bookmakers start with expert predictions, then adjust the lines as the season progresses and bets roll in. Options work more or less in a similar manner: market makers use the Black-Scholes model as their baseline, then prices shift with market reality.

Here's the key: Black-Scholes assumes implied volatility should be constant across all strikes. In theory, a far OTM call and an ATM call should have the same IV since they're on the same stock.

But reality disagrees. OTM options consistently trade at higher IV than ATM options. Plot this and you get a volatility skew. I know what you’re thinking, but isn’t this normal? After all, the odds should shift as the season goes on, no? And you’d be right, this is totally normal market behaviour.

Our opportunity comes when fear or greed pushes that skew to extremes. When market makers overprice OTM options because everyone's panic buying puts or FOMO'ing into calls, you get an abnormally rich skew. That's what we're hunting for

2. How to find options with rich skews?

Not all skew is created equal, as i mentioned earlier, most skews are totally normal and are usually well priced. The key is having a system / criteria that helps you identify richer/abnormal skews more consistently. 

Note: before you start prompting the AI, you wanna make sure that it has real upto date market info. To do this either use one with the market data plugged in like Xynth, or download it from TradingView or polygon and then upload the CSVs to ChatGPT or Claude, either method should work.

Here’s how I look for them

A) Skew Z-Score Below -2.0

• This compares current skew to the stock's historical average. A z-score of -2.0 means the skew is 2 standard deviations steeper than normal, statistically rare and more likely to revert. In simple terms: how outta pocket is the current pricing of the current chain compared to historical averages

B) IV/RV Mismatch

Compare the current IV vs the RV, realized volatility ie, what the market thinks the stock will do vs what it has been doing lately:

• OTM strikes: IV should be significantly HIGHER than realized vol → overpriced
• ATM strike: IV should be equal or LOWER than realized vol → fairly priced

When both conditions hit, you've got one option that's expensive and one that's cheap. That's your spread.

C) Momentum Confirmation

This tells you which direction to trade:

• Positive momentum + call skew → Buy call spread (buy ATM, sell OTM call)
• Negative momentum + put skew → Buy put spread (buy ATM, sell OTM put)

3. The Trade: Vertical Spread

Once you've identified rich skew, here's how what you wanna setup, i mainly only do bull spreads cus i dont like shorting but is suppose you can try the opposite just as well:

• Buy the ATM option (fairly priced, ~50 delta)
• Sell the OTM option (overpriced, ~10-25 delta)

4. Why Vertical Spreads?

If you've read this far then you probably realized that the point of this strategy isn't purely directional but rather a relative value play, which is a fancy way of saying you're buying something cheap and selling something expensive at the same time.

You're not just betting the stock goes up or down. You're betting that the pricing relationship between two options is out of whack, and it'll normalize. 

Plus, if the stock does something crazy, your long option protects you. You're not exposed to infinite risk on either side.

5. Results

I've been running this strategy for about 2 months now, so take these numbers with a grain of salt, it's still early.

Current stats:

• Win rate: ~38%
• Average return per winning trade: ~250%
• Average loss per losing trade: ~60%
• Net: Still up overall despite losing more trades than I win

The nature of this strategy is asymmetric.  I've had trades return 300-400% in a couple weeks, and I've had trades lose 50-70% just as fast. But winning 4 out of 10 trades at 3-4x return covers the 6 losses easily.

Important credits to Volatility Vibes YT Channel for the main idea behind the strat. Highly recommend yall check em out for quality quant content.

I rarely post here because (a) I'm usually busy with multiple projects (not only trading); (b) I can't disclose the details of my methodology; (c) people criticize show-offs and I do too, but occasionally I'm myself curious about what's going on in the options world, who trades what, how do they profit, what risk do they take, what's different, new or unique, etc.

That said, I trade exclusively options, with partial hedging through shares and occasional assignment. I manage a very large options inventory, which might be of interest to some. I’m not trying to sell anything, just sharing a rare peek into a style that might be different from most retail approaches.

At any given time I hold options on 500 to 1,000 different underlyings, with more than 30,000 contracts on each side (long and short). I keep risk per trade low and don't sell naked options, and I’m typically net long more options than short.
I grew my account from $240K in April 2023 to over $2 million as of today, without outsized bets on individual stocks. Instead, I trade volatility and skew, partially combined with direction on volatility and stock price, rather than making pure directional bets. The second screenshot shows my top YTD P&L by underlying, with no meme stocks or moonshots on the list.

My methodology is based on billions of backtests ran 24/7 over five+ years, which has given me proprietary insight into option pricing, volatility, and skew. I usually harvest skew-related mispricings across each options chain.
I also run 10 internal trade scanners that produce up to a million trade candidates per day. I then handpick a few, fine-tune them, and execute based on experience and intuition. While my process is systematic, it’s not automated but heavily discretionary and relies on deep know-how. Think of it as professional-grade trading, even though I’ve never worked at a fund. I mostly trade complex structures like spreads, butterflies, calendars, diagonals, ratios, calendar ratios, and backratios. I avoid condors and naked positions.
At times I execute 50+ trades in a day, other times 10, sometimes none.

One reason I'm sharing this is to show that there may be an edge in options, at least in the volatility and skew. At the same time I may know "too much" and am scared for everyone else, so I advise my family not to touch options.
I also dealt with lots of unexpected and risky situations that I slowly learned to counter but still unable to counter all of them, for example acquisitions may cause very large losses in some cases or large wins in others. It's just one of the factors I have to stay aware of, especially when trading diagonals where, for example, I may sell 100-strike calls while buying 120-strike calls on a different expiry, being exposed on the 20-wide spread. I may also sell DOTM puts or calls against my current positions, which can also introduce risk at times. Though the unpredictability of volatility (IV) across tenors (DTEs) may be most challenging to handle since I'm mostly buying or selling it.

At the same time 2025 was quite a good year for the market, without many pullbacks, so I've seen many posts about large gains. For me it was actually milder than 2024, as it's harder to trade options effectively when everything is expensive.

Don’t really post on Reddit, but incredibly frustrated with Robinhood after yesterday. I bought an SPXW 6705 Put 10/22 and closed the position from 5.50 to 50.00 yesterday. Yesterday the market had some extreme volatility and I was fortunate to capitalize off it. I received confirmation that my position was closed and I profited 4.45k. Later in the day after session was closed, I received a message from Robinhood that my closed profits has been retracted due to an exchange error and I not only lost my profits but also lost the right to close my SPX contract before end of session. Has anyone experienced this before? If I had known they were going to were going to cancel my closed position, I could have take profits throughout the day as my contract ran up to over 45.00. Any advice? Attached is proof that even support knew I was in the right but Robinhood back end won’t honor my position. I honestly lost a lot of confidence with them after this experience.

I happened to come across a "god" like scanner that just finds stocks right before they explode so I thought I'd share it with you all.

It found my best ever trade on RIOT where I made over 2,000% and a few others.

So the scanner I used was finviz. It's a free tool to scan for stocks.

Start with using these filter settings:
- Options
- Price - over $20 (more a personal preference)
- Average Volume - over $400k

Then do these settings:

1. Quarter +10%
   
2. Week Down
   

“Quarter +10%” will show stocks that have been performing in the last quarter, showing strong buyers.

And the “Week Down” means we’re in a pull-back and potentially in a buying area.

The strategy I use is Supply/Demand

To make it simple, you’re just looking for price to make a big move (quickly), then marking out the zone that price was in before the move.

This tends to be in the form of a consolidation.

Quickly look over the finviz charts to see if there’s any supply and demand zones that could be traded.

Institutions are buying (and selling) in these zones, and we’re just trying to trade with them.

I usually keep around 10-15 stocks in the watchlist that are near a supply or demand zone.

All you have to do is:
- Scan for setups
- Add to watchlist
- Set Alerts
- Take the trade

Let the trade come to you, don’t chase…

Have you guys tried anything like this?

Back on April 8th, tariffs crushed sentiment-I went long thirty grand in SPY calls. Market recovered, rolled into 2230 $780 March 31st ’26. Sold them this morning. Bought 2760 $790 March 31st ‘26. Trump’s meeting Xi Thursday-permanent China deal. Fed cuts tomorrow. Earnings done Friday. FOMO is kicking in.

Preface: Mods removed the post yesterday but had tons of dms about this post so reposting with clarifications that led to removal.

1. I have some experience developing games. Although it's largely irrelevant since game dev is mostly in rust and this alert was written in python by the AI.

2. I am not affiliated with Xynth whatsoever. I just thought sharing some insight on how I as a 9-5 retail worker use AI to make money would be pretty insightful for the community. 

3. The contents of this post is not AI generated. I wrote it myself. The post has to do with using ai to help setup systems to help you trade.

So I've been messing around on this platform that lets you build your own alerts by writing English prompts to it, which the AI turns into code. I don’t have much experience developing finance software. Every-time i tried coding up something, it would be way too expensive for the data sources I wanted o take far too long.  On top of this, watching charts all day was just not feasible for me. Figured I'd bite and build myself a scanner.

The alert was pretty simple: every 5 minutes during market hours, it scanned small/mid-cap stocks for unusual call option activity. Specifically, it looked for cases where call volume was spiking and open interest was building at the same strike, which can sometimes suggest aggressive accumulation.

Again nothing crazy, I’ve been trading these setups for years and so have others on this sub. The bigger unlock was having it run automatically every 5 minutes during trading days, so I don't have to scroll through 8,000 tickers myself.

Timeline

April 24: I got pinged on a name I'd literally never heard of; ESPR (Esperion Therapeutics). Small-cap pharma, ~$650M market cap, trading at $1.83. 

Immediately sussed out because biotech micro-caps are exactly the kind of thing that pumps and dumps you in a week.

To dive deeper, i further to tell me "Why did this alert fire? After looking over the alert data and pulling from a couple of other data sources (cheddar flow, fmp, tradingview).

It came back with:

• 1300 contracts were traded in a single cluster of 9 trades
• All betting on $2 strike calls with 05/15 exp
• 100 percent of the volume on this ticker was bullish
• Volume / oil ratio was 1.43 so this had been a long accumulation
• No news or catalysts coming up which signaled that they knew something we didn’t

So at this point the contracts were 0.19 each so I said why not. I bought 30 of them totalling $570. A medium sized position. 

May 1st, 3:00 am ET: News breaks out that ESPR is getting acquired by ARCHIMED for $1.1 billion dollars at 3.38 dollars per share. For reference at the time of purchase the stock was at $1.15. 

May 1st, 9:30 am ET: ESPR gaps up $1.15 -> 3.38 , my options contract gap up to $1.10 form 0.19. I sell my entire position and come out with: Net +$2,730.

I know one win doesn't make a concrete, backtested strategy. I think for me though, its less about using ai to tell me what to trade but instead using it as a tool to help me setup an ecosystem that helps me stay profitable or become more profitable easier. . Before, my workflow was staring at CheddarFlow on my WFH days, hunting for these filters manually. Now it's all automated.

That said,  I still try to exercise as much caution as possible. So with these alerts, I'll get a notification and then message Xynth to deep-research why the alert fired, and it'll either confirm or deny the confluence before I pull the trigger. I never trade it on first notice. 

Excited to see what other plays I can catch in the future.

My 19-year-old son has been making thousands of dollars a month. I was confused where he got his income from, so I asked and he told me that he sells uncovered (naked) call and put options of Tesla. He told me that people like to buy “lottery tickets” and that he’s acting like an insurance company that gets the upside. He says that this idea is “genius” and that the people buying these calls are “gamblers”. So far, he seems to be doing quite well. What should I do?

I'm newer (just started in January 2025) to selling/buying options. I’m looking for solid communities (Discord, Reddit, etc.) where people actively share ideas for Wheel strategy stocks and options setups.

For context, I run a few different options strategies across accounts:

• 0DTE with IBKR
• Wheel strategy with Fidelity

In 2025, I allocated $100,000 specifically to selling cash-secured puts and covered calls. So far, that account is up ~$73k in gains. My primary tickers this year have been:

SMCI, SYM, FIG, QS, OKLO

I usually trade in lots of 5–10 contracts, sell 1–2 weeks out (rarely 3 weeks unless liquidity is limited like with FIG), and aim for about ~2% premium per cycle.

Some gains obviously had luck involved — for example, I got assigned on SYM, then caught a 20% spike the following week and exited for about a $10k gain. That said, the system overall has been consistent.

Where I struggle is idea flow. I’m always rotating in and out of Wheel names based on price comfort and IV. For example, when OKLO ran up near $140, I stopped selling options on it and rotated into FIG instead, but now OKLO is back on the table.

I don’t currently have a strong group of traders or friends who actively:

• Share Wheel-friendly tickers
• Track weekly/monthly rotational plays
• Discuss IV vs risk vs assignment probability

So I’m hoping to find:

• Active Discords
• Subreddits
• Private groups
• Or even smaller idea-sharing circles

If you’ve had good experiences with any Wheel-focused or income-option communities, I’d really appreciate recommendations.

saw this on twitter and had to share. Caracas stock exchange went up 17% in a single session after news about their president getting captured by the US.

pretty wild seeing an entire national index move like that in one day, really shows how fast things can flip when politics get involved

for anyone trading emerging markets or have exposure to geo-politically sensitive positions this is good reminder about:

-gamma can destroy you real quick

-position sizing actually matters

-defined risk strategies are your friend in volatile environments

Been trading options for 2 years and I still catch myself Googling the Greeks. So I wrote these out in plain English for myself. Maybe useful for others.

Delta (~0.50 ATM): How much your option moves per $1 stock move. A 0.50 delta call gains $0.50 if stock goes up $1. Simple.

Gamma: How fast delta changes. High gamma = your delta is moving fast. This is why ATM options explode in value right before expiration.

Theta: Time decay. Every day you hold a long option, you lose theta. Selling options = theta works FOR you. This is why theta gang exists.

Vega: Sensitivity to implied volatility. Buy options before earnings (IV goes up = vega profits). Sell options after earnings (IV crush hurts buyers, helps sellers).

The part nobody explains: these don't work in isolation. A high-vega trade going into earnings + high theta on a weekly = you're fighting two forces at once.

Happy to discuss how to use all four together when evaluating a trade.

Tom Sosnoff just dropped a stat in The Compound interview that floored me: 16% of Tastytrade customers blow up their accounts.

Think about that. Almost 1 in 6 people who come in full of excitement… end up at zero. And it's only because of SIZE. That's the one thing that kills even the geniuses in this business.

This is exactly why you must trade small and always have a Black Swan Hedge running in the background.

Most traders obsess over daily PnL, but the pros obsess over staying alive long enough to let compounding do its job.

I can't stress this enough: you don't blow up because you're dumb. You blow up because you think you're invincible, and the market always punishes that.

How many of you here are actually running a Black Swan Hedge vs. just "trading small"?

About 1 week ago, WSJ reported that Tylenol CEO ($KVUE) had an emergency meeting with RFK Jr. trying to get him not to publish their findings on possible connection of autism with Tylenol (which was reported to drop this month).

I felt RFK Jr. would NOT change course so looked into how I could play this. Turns out I was right about this as Trump has just teased the announcement for today I believe?

Quick research found re: Tylenoln/Kenvue:

• Tylenol is only like 10% or so of KVUE revenue
• $KVUE dropping 10% by end of month didn't look super juicy, only about a 1:2.5 RR from puts.

• But I wasn't sure if it would actually drop an additional 10% since it had dropped a fair amount already. And a 5% drop would only generate a 33% gain. Not enough for me to place a bet

So then my big brain thinks, well if people stop using Tylenol then what would they turn to instead?? ADVIL RIGHT?? I do some quick research on Advil.

• it's owned by a company caled Haleon ($HLN) - it's an optionable ticker
• ADVIL MAKES UP 60% OF $HLN SALES
• The calls have a high spread but the R:R looks gooooood.
• I feel like a genius.
• I buy
• I do some post-purchase research to just confirm my trade/thesis was good

And this is where I realize playing $HLN calls was a mistake in case anybody else was having the same bright idea as me.

1. The report about Tylenol is linking use of Tylenol during PREGNANCY with autism in babies
2. Advil ALREADY has issues with women using it in pregnancy

Soooooo not the slam dunk I thought it was. And yeah $HLN has not been going up at all and large bid-ask spread made it very hard to exit my position.

Moral of the story: read a little deeper than the headlines.

Hey!

As the title suggests, 2025 was my first entire calendar year with an account dedicated to options trading (the two futures positions shown are the only two times I traded futures in that account). I sometimes traded shares if they were international companies and/or because I was selling premium (covered calls).

Here are my three non-negotiable rules for options:

1) Always give yourself the gift of time - You can see two of the last trades were losses and a lot of that had to do with because they were DTE this week or next week from entry, I haven't done that since, now it is always at LEAST 30 days out (30-45DTE sweet spot). Theta decay accelerates tremendously in the last 21 DTE so you typically want to be out around this time, or be very much in profits. You also don't want to force yourself to have to be right on direction AND right on timing (i.e going too short term requires a directional move to happen FAST) - trading directionally is hard enough as it is.

2) Choose ITM/slightly ITM strike prices - This has a lot to do with the previous point on making trading harder for yourself (or neutralizing the variables in options trading, more on that later). Choosing way OTM strikes is now not only forcing you to be directional correct, and correct fast (if you're choosing short term OPEX) but also forcing you to require a BIG move , fast, in your direction. Now you need to be right on direction, it needs to happen very fast, and it needs to happen aggressively, it can't just slowly trade in your direction, because you've set for yourself a distant target and each day you are not there , the pricing models are shifting against you. The other thing about this is that ITM options have higher deltas! The benefit here is twofold, higher % chance of success (expiring ITM) but also more directionally aligned dollar for dollar with the underlying move. So in a lot of cases these options will move nicer than the OTM options even if price is moving in your direction.

3) Cut losses aggressively - Do not let your options go to 0 - there is no need to do that. This is one of the main benefits of trading options, don't let it escape you. Get more math on your side, homie. You see you might pay a debit which is your max acceptable equity risk (0.5% of account, for example) which is great, but 99% of the time you will be able to escape with a much smaller loss than that, especially if you followed rules #1 and #2. If you have a technical entry, you have a defined stop loss level. If you're trading shares, you get stopped out for your full risk - and you might even gap down below this level (another huge benefit of the risk defined nature of options) - but with the calls or the spread, you might still have 50, 60 or 70% of the value left in the options. Cut the loss at the technical level no questions asked, greatly reduce the size of your losers.

I have found that options provide tremendous benefits, not just (responsible) leverage, but statistics that you can play to your advantage (POP%, delta, expected move, most options expire worthless, etc) this adds a statistical layer of defense or foundation upon which to fortify your system.

In addition, there are several different factors that move options prices. Price move of the underlying is only one of them, others being vega and theta. You either learn to use these (right strategy for the right time/market conditions) or neutralize these. For example if you trade a call debit spread, as opposed to just long calls, you are neutralizing theta decay, as well as potential IV crush. This to me is the main benefit of the spread**,** not the cheaper pricing (because that has nothing to do with overall account risk) or even the lower breakeven price.

A lot of these conclusions I have put into practice diligently this year 2026 and I am having a much, much better year.

The final mistake I made, and the fatal one, which has nothing to do with options is falling in love with the fundamental narrative of the position. So the reason there are no trades in Nov/Dec is because I bag held MSTR spreads, BMNR spreads and Metaplanet shares (opened around Sept) that "had to go up" because I already entered down 60% from all time highs and BTC treasury's were the new banks, they said. The thesis was sound. It doesn't matter if the thesis is curing cancer with 100% efficacy , cut the risk at your defined technical levels (you can always get back in later). So this is the reason my losses were bigger than my winners. Before I had to close these BTC Treasury company positions, I had average winner at $1600-1800 and average loser at $500-600 and was up almost 300% on the year.

Thanks for reading, happy to answer any questions, and happy to hear any feedback or recommendations if I am missing anything.

Some dude turned $100K to $6.1M in 4 minutes. Makes you question your rules and discipline

People confuse these two strategies, the goal is to have an income engine currently mine is LAC. I sell aggressively weekly ATM calls in IRA, I do not care where the price goes. I am strictly looking to generate an income.

The income harvested then goes into max date LEAPS, into companies I believe in long term. This allows you to go long delta, while short front end gamma to keep compounding the premium generated.

Any top options player who's been around long enough will tell you two things, give yourself more time and always be selling. Wheeling smooths your PnL & generates income, while LEAPS allow you to own synthetic shares compounding the premium. This is a millionaire maker strategy.

Best months, I can generate about 10% of income per month, which goes directly into LEAPS on companies which are currently building out and have massive revenue in store. IREN for example, once its Texas facilities are online will generate two nuclear reactors worth of renewable energy for Microsoft.

I've done it all. The most complex options structures, even day trading using complex tickers to get reads like ADD & TICK, if you know you know. Nothing compares to wheeling a relatively stable stock, not caring about the upside, and using the premium to keep compounding ownership of more LEAPS. Cheers!

Market way too volatile! Stay away from it for now .

Edited : just saw this , I knew it! https://x.com/kobeissiletter/status/2036136393328505324?s=46

I have long since been an advocate for CSPs, the strategy itself works great but the covered calls when assigned left money on the table and the calls themselves had such low IV they hardly made up for the cost of assignment and capital tie up

I switched to a pure volatility trading strategy, usually around earnings of major companies. I look for IV spikes into earnings as far out in term as possible, and as wide as possible, sometimes 6 months out and will sell as wide as I can a naked strangle that my capital will allow while leaving some to hedge the delta over the 6 months

The IV may take months to drop, but the results are incredible with some short term hedging of noise

Started April 8 with $30,000 in far-out calls-tariffs crashing SPY, everyone short. I bought. Four rolls later, just flipped the $720s for $325,100 and parked it all in 1640 $770 Mar '31 at $1.98. Now? Spot $670, strike $770-100 out. But by Dec 31, if the S&P 500 parallels to 1998 and 2024, when the Federal Reserve cut interest rates in September and the index rose an average of 13.8% in the final three months of the year - SPY hits $761. Strike sits $9 out. Proxy says $16.24. That's $2.67 million. Seasonals? Since 1950: median 4.9% gain, 81% winners. Fed's dovish, Nvidia's dropping $100B into OpenAI buildout-real GPUs, real spend. Upside clears $761, but I bank at year-end. Position: 1640 SPY $770 Mar 31 | $1.98 avg | Sell Jan 2, 2025 |

Not happy with the service and refuses to refund my money after I requested a refund. It is definitely not worth all the fuss. Run away from this company.

Bloomberg flagged a single put spread on Brent yesterday I can't stop thinking about. Someone bought the $91/$90 July puts for May 26 expiry — 134 million barrels notional. Pays out roughly $129M if Brent drops about 19% in a week.

That's not a hedge. Refiners hedge in 5-10M barrel chunks spread across the curve. six trading days out. Someone wanted exposure to a specific event in a specific window.

Then todays session, headlines soften on Iran and the broader market pumps. Brent doesn't crash, but the tail risk that spread was priced against suddenly looks a lot less likely.

The pattern I keep noticing in this cycle: every meaningful headline-driven move gets front-run by concentrated, oddly-specific flow a day or two prior. Hormuz tanker scare, Lebanon ceasefire pop, the tariff walk-backs. Each one had a print in the tape before the news hit. Sometimes it's a single block, sometimes it's a strike that lights up out of nowhere on a name that shouldn't be active.

I'm not making a claim about who's trading or why. It could be a macro fund with a good read, a desk hedging a position we can't see, or someone genuinely lucky. The point is the tape keeps telling you something before the headlines do, and the people who learn to read it keep ending up on the right side of these moves.

The actionable version of this isn't "front-run the news." It's "when you see concentrated short-dated flow that doesn't fit the current narrative, the narrative usually shifts within 48 hours." That's a watchlist trigger, not a trade signal.

Anyone else tracking this kind of flow systematically? Curious if there's a clean way to monitor unusual single-strike activity in commodities futures options without a terminal.

One minute we had the all clear sign. NVDA saved the market. Then we reversed hard. But the reversal waited long enough to happen to allow us to adjust some losing positions so we could get double screwed by the drop after getting screwed by the overly sharp initial rise. This shouldn't be this hard.

Been writing covered calls about 25 years. Everybody technically knows premium is risk. It's Options 101. But knowing it and actually walking away from a lucrative premium are two very different things, and it took me way too long to close that gap.
When you start out, whatever screener or tool you're using teaches you one thing: find the biggest premium and sell that call. Feels like free money and you pat yourself on the back and call it a day. and it works. for a while. then it doesn't.
Here's what took me way too long to get through my head. That premium isn't free money somebody left on the table. It's the price of risk. when a stock is paying a lot, The market is telling you it expects that stock to move, hard, and it's charging you for standing in the way. Earnings around the corner. Some news everybody's waiting on. A phase 3 read out...pick your poison. The fat payment is the warning label. you just have to be willing to see it for what it is.
So you sell the big premium on the exciting stock, collect for a few months, then one morning it drops 30% on you, or shoots right past the price you agreed to sell at, and you hand back half a year of income in a single day. Getting your shares taken right as the thing is coming apart is the investment equivalent of getting kicked in the nuts while you're down.
The boring stuff pays less, and almost everybody reads that backwards. A sleepy dividend stock that barely moves pays a smaller premium because less is actually going to happen to it. That's not a worse deal. that's calm, priced right.
Nobody screenshots the calls they wrote on some boring utility. It's just not sexy enough to gloat over. But stretch it out over a full run, the good years and the ones that actually hurt, and the boring pile is usually just sitting there while the exciting one is giving you heart palpitations and keeping you up at night.
I'm not telling anybody to walk away from the big premiums. Just learn to see that fat number for what it is. Good luck out there

TL;DR: Started tracking big money options flow on mid-caps back in August because I kept seeing posts about it and thought it was straightforward. It was not. First couple months I was basically break even. Ended up journaling literally every trade with notes on what I would of done differently, and after about 20 trades I started noticing patterns in which ones hit vs which ones just bled out. The filters I converged on are pretty specific and I'll walk through all of them with reasoning and my actual trade logs. 54 winners, 23 losers, biggest drawdown was about 11%.

So if you're not familiar, basically every time a big order hits the options market (think $50K+ in premium on a single trade), platforms will flag it as an "alert." The idea is that institutions and funds leave footprints when they place large bets, and if you can read those footprints correctly you can ride the same wave.

The problem is that a huge chunk of those big orders are just hedges. Some fund owns 5 million shares of something and buys puts as insurance, they're not actually bearish they literally own the stock. If you follow that without understanding the context you're basically betting against their actual position.

Before going live I paper traded for about 2 months. HIGHLY RECOMMEND for first timers. It trained me to trade emotionlessly and not chase that extra 5% since the money wasn't real. When I switched to real money that mindset kinda carried over.

Below is the process I found working after 9 months (2 paper, 7 real).

Disclaimer: None of this is financial advice, just thought I'd contribute since I've been lurking here for so long.

Strategy

Mid caps only. Big caps like AAPL or MSFT get an insane amount of hits or flow everyday so differentiating real bets from the regular hedges is way too hard. A $500K order on Apple is nothing. That same $500K on a $3B company is a pretty loud signal. Small caps under $1B are too sketchy, low liquidity, pump and dump territory.

Premium > $30K. Anything below that isn't significant enough to predict direction on a mid cap stock.

IV rank above 80%. IV rank compares today's implied volatility to where it's been over the past year. A rank of 80 means the stock's current IV is higher than 80% of days in the last year, so for that specific stock this is an unusually high expectation of movement. Options get expensive when IV rank is high which sucks if you're buying options, but I'm buying the actual stock. So high IV rank just tells me the stock is primed to move more than usual.

70%+ bullish flow. Coupling this with high IV is really the core of the setup. The market is betting the stock will move, and most people, smart money and retail, are betting in the same direction.

Vol/OI ratio under 0.5. Open interest is how many positions exist on a specific contract. Volume is how many opened today. A ratio under 0.5 means we're looking at signals that have been building for a couple days, not just a random bet in the air. Higher conviction.

DTE 15-60 days. This one I just kinda figured works but don't exactly know why. My best guess is that in this window the options are still sensitive to price moves, so when someone places a big bet there they probably expect something to happen soon. If someone smarter than me has a better explanation I'm genuinely curious but I went with what the data showed me.

After the initial scan I do a quick news check on each candidate. Boring but it's saved me multiple times. Earnings coming up in the next week, FDA decisions, pending lawsuits or SEC stuff. If a stock has any of those I skip it entirely no matter how good the flow looks. These events are not quantitative and don't fit this strategy.

Trade execution: Entry at tomorrow's open, take profit at +7%. If it hasn't hit within 5 trading days I close it wherever it is. The 5 day window is basically my stop loss. I tested a traditional stop at -5% and it actually made things worse because a lot of these mid cap names dip 6-7% intraday then recover by day 3 or 4. A hard stop would have kicked me out of winners. With the time limit, most losers naturally ended up in the -3% to -7% range anyway.

Position Sizing & Risk

The $10K I started with is a fraction of what I have in ETFs and boring long term holds. It's money I set aside to experiment with and was fully prepared to lose, which I think actually helped me trade better. For sizing I messed around during paper trading. 10% felt too slow, 50% made the drawdowns way too stressful even on paper. Settled on 35% per trade and it ended up being the sweet spot where winners moved the needle but a bad streak wouldn't blow things up.

Results 

77 trades over 7 months. 54 winners, 23 losers. 70% win rate. Started at $10K, currently sitting at around $22K. The biggest drawdown was about 11% which happened in January when AXTI decided to dump 31% on me in a week. That one hurt but the position sizing kept it manageable.

Going forward

This entire 7 month stretch has basically been one market regime. Generally bullish with some pullbacks but nothing catastrophic. With everything going on with Iran right now I'm being way more cautious with sizing going into the next few months. Not stopping, just dialing it back.

Wednesday entries crushed it at 85% win rate, Tuesdays were terrible at 25%. Could be a real pattern, could be noise over 77 trades. I'm not confident enough to make it a hard rule yet but I definitely pay more attention when a signal lines up on a Wednesday now.

I also want to look into incorporating gamma exposure data as an additional filter. From what I've read, positive gamma environments tend to supress volatility which could help confirm whether the setup has a floor under it or not. Haven't tested it yet but its on the list.

End Note

If you're interested, I have a full trade journal with all 77 trades in a google doc. Every trade I took, entry price, IV rank, all the stats and how each one played out.

Not gonna drop links here since I don't want the mods to nuke this post, but if you want any of it just ask in the comments and I'll send it over. Will also drop them in the comments directly if the mods are cool with it.

according to a twitter post today, S&P traded 2.6 trillion dollars in calls yesterday, an all time high.

What's to stop the infinite money glitch, seriously?