Get Tability: OKRs that don't suck | Learn more →

8 strategies and tactics for Options Trading

What is Options Trading strategy?

Team success often hinges on the ability to develop and implement effective strategies and tactics. It's a bit like playing chess, except that you have more than 1 player on each side.

Developing an effective Options Trading strategy can be intimidating, especially when your daily duties demand your attention. To assist you, we've curated a list of examples to inspire your planning process.

Feel free to copy these examples into your favorite application, or leverage Tability to maintain accountability.

How to write your own Options Trading strategy with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI generator below or our more complete goal-setting system to generate your own strategies.

Options Trading strategy examples

We've added many examples of Options Trading tactics, including a series of action items. We hope that this will make these examples as practical and useful as possible.

Strategies and tactics for developing a Robust Options Trading Methodology

  • ⛳️ Strategy 1: Execute Entry Criteria Precisely

    • Monitor EMA 5 and EMA 9 crossovers on 15-minute charts
    • Confirm crossovers with candle close above both EMAs for bullish signals
    • Verify crossovers below both EMAs for bearish signals before taking a position
    • Buy call options on confirmed bullish EMA crossovers
    • Buy put options on verified bearish EMA crossovers
    • Use RSI to confirm overbought or oversold conditions
    • Implement MACD to confirm momentum direction
    • Incorporate volume analysis to validate strength of move
    • Backtest entry criteria on historical data
    • Refine entry signals based on backtesting results

  • ⛳️ Strategy 2: Implement Disciplined Risk Management

    • Apply a 4% profit target as the primary exit condition
    • Set a stop-loss at 2% below entry to control risk
    • Calculate position size based on risk-to-reward ratio
    • Limit trades to no more than 10 per trading day
    • Evaluate each trade on hitting predefined risk parameters
    • Adjust stop-loss levels based on market volatility
    • Test risk management strategies during backtesting
    • Utilize sizing techniques like Kelly Criterion for optimal sizing
    • Ensure trade frequency aligns with strategy accuracy
    • Document risk management processes and outcomes

  • ⛳️ Strategy 3: Enhance Strategy with Technical Indicators

    • Add RSI to filter out false signals
    • Incorporate MACD to gauge market momentum
    • Analyze volume to confirm trade signals
    • Experiment with Bollinger Bands to assess market volatility
    • Utilize ATR to set dynamic stop-loss levels
    • Regularly optimize indicators using past market data
    • Test additional indicators during periods of market stress
    • Develop a multi-indicator filter system to increase signal quality
    • Backtest strategy with varied indicator combinations
    • Review and update technical indicators quarterly
options-tradingrisk-managementtraderrisk-analysttrading-teamrisk-management-team
Implement these strategies

Strategies and tactics for selling put options on ETFs for profit

  • ⛳️ Strategy 1: Identify suitable ETFs

    • Research ETFs with high liquidity
    • Analyse the historical volatility of potential ETFs
    • Select ETFs with strong fundamentals
    • Monitor market trends and overall economic indicators
    • Use technical analysis to identify potential pullback points
    • Evaluate the impact of current news events on ETF choices
    • Shortlist ETFs with attractive risk-reward profiles
    • Regularly review the performance of shortlisted ETFs
    • Seek expert opinions or financial advisors' views
    • Create a watchlist for continuous monitoring

  • ⛳️ Strategy 2: Set optimal entry points

    • Determine key support levels of chosen ETFs
    • Identify historical pullback patterns
    • Use moving averages to find entry signals
    • Assess the option Greeks to understand risk exposure
    • Check implied volatility for potential spikes
    • Set alert systems for entering sell put positions
    • Adjust entry levels based on market conditions
    • Combine technical indicators to refine entry points
    • Practice patience and wait for high-probability setups
    • Simulate entry strategies using paper trading

  • ⛳️ Strategy 3: Prepare for risk management

    • Determine an appropriate position size
    • Set a maximum acceptable loss for each trade
    • Use stop-loss orders to manage downside risk
    • Implement a risk-reward ratio policy, minimum of 1:2
    • Maintain a diversified ETF portfolio to mitigate risk
    • Use options spreads to limit potential losses
    • Review the portfolio performance regularly for adjustments
    • Set aside a reserve fund for unexpected market volatility
    • Stay informed about global market events impacting ETFs
    • Train psychological discipline to stick with risk management rules
options-tradingetfsfinancial-analystrisk-managertrading-teaminvestment-strategy-team
Implement these strategies

Strategies and tactics for developing a Binary Trading Strategy

  • ⛳️ Strategy 1: Analyse market trends

    • Examine historical price data of relevant assets
    • Identify patterns using technical analysis tools
    • Monitor news and economic indicators for potential impacts
    • Use charting software to pinpoint key support and resistance levels
    • Determine the volatility of the chosen market
    • Develop prediction models based on identified trends
    • Utilise moving averages to confirm trends
    • Identify seasonal factors that may influence market changes
    • Use backtesting to validate predictions on historical data
    • Keep track of successful trend analysis for future reference

  • ⛳️ Strategy 2: Implement a risk management plan

    • Establish a clear risk-reward ratio for trades
    • Set a stop-loss level to limit potential losses
    • Determine the maximum amount of capital per trade
    • Build a diverse portfolio to spread risk
    • Monitor trades regularly to adjust positions as needed
    • Use position sizing to control risk exposure
    • Stay informed about market news to anticipate rapid changes
    • Review and update risk management rules periodically
    • Prepare a plan for unexpected market movements
    • Maintain a trading journal to capture lessons learned

  • ⛳️ Strategy 3: Enhance decision-making skills

    • Study psychological factors affecting trading behaviours
    • Practise making quick decisions under simulated conditions
    • Regularly assess and analyse trading outcomes for learning
    • Participate in trading forums to learn from others’ experiences
    • Read relevant literature to expand trading knowledge
    • Evaluate the impact of emotions on past trade results
    • Attend webinars and workshops to improve technical skills
    • Establish a decision-making checklist for trading scenarios
    • Learn to identify cognitive biases and work to mitigate them
    • Schedule regular breaks to maintain a clear mind during trading
binary-optionsrisk-managementtraderfinancial-analysttrading-teamrisk-management-team
Implement these strategies

Strategies and tactics for investing in Nifty 50 Options

  • ⛳️ Strategy 1: Conduct thorough market research

    • Start by analysing historical Nifty 50 index trends
    • Track recent financial news affecting the Nifty 50 components
    • Use technical analysis to identify support and resistance levels
    • Study macroeconomic indicators influencing the stock market
    • Identify patterns in previous Nifty 50 option cycles
    • Stay updated with geopolitical events impacting the market
    • Follow expert opinions and market forecasts
    • Evaluate changes in sectoral performance of Nifty 50 constituents
    • Use risk management tools to assess market volatility
    • Regularly monitor market sentiment using financial planning tools

  • ⛳️ Strategy 2: Develop a disciplined trading plan

    • Set a clear entry and exit criteria for trades
    • Define your risk tolerance level and stick to it
    • Allocate a fixed percentage of your capital to each trade
    • Implement stop-loss orders to limit potential losses
    • Use options pricing models to assess fair value
    • Regularly review and adjust your trading strategy based on outcomes
    • Diversify options purchasing to spread risk
    • Set realistic profit targets for each trade
    • Document all trades in a journal for future reference
    • Take emotions out of trading decisions by following your plan strictly

  • ⛳️ Strategy 3: Enhance knowledge and skills continuously

    • Attend webinars and workshops on options trading
    • Follow online courses by reputable financial experts
    • Read books and articles on advanced options strategies
    • Join online communities and forums focused on options trading
    • Understand regulatory changes affecting options markets
    • Subscribe to financial journals and periodicals
    • Engage with a mentor or coach experienced in options trading
    • Practice trading in a simulated environment before investing real capital
    • Regularly assess and improve your analytical skills
    • Stay informed about technological advancements in trading platforms
tradingoptionsmarket-analystfinancial-plannerresearch-teamtrading-team
Implement these strategies

Strategies and tactics for implementing a moving average strategy for binary options

  • ⛳️ Strategy 1: Utilise short-term moving averages

    • Select a short-term moving average period such as 5 or 10 days
    • Monitor asset price movements and identify crossover opportunities
    • Use short-term moving averages to spot quick trends for short expiry trades
    • Backtest the short-term moving average strategy on historical data
    • Establish entry and exit points based on moving average crossovers
    • Define the expiry timeframes that align with short-term trends
    • Combine with other technical indicators for confirmation
    • Implement risk management tools like stop-loss orders
    • Evaluate strategy performance regularly with practice trades
    • Adjust the strategy based on market conditions and trading results

  • ⛳️ Strategy 2: Employ medium-term moving averages

    • Choose a medium-term moving average period, such as 20 or 50 days
    • Identify trends or reversals by observing moving average patterns
    • Use medium-term moving averages for trades with moderate expiry times
    • Backtest the effectiveness of the medium-term strategy with historical data
    • Determine signal strength by analysing moving average slopes
    • Incorporate market analysis to support moving average signals
    • Apply a moving average crossover technique for trade entries
    • Set clear rules for take profit and stop loss limits
    • Monitor and review strategy outcomes to make improvements
    • Stay informed of macroeconomic factors impacting asset movements

  • ⛳️ Strategy 3: Combine multiple moving averages

    • Select long-term, medium-term, and short-term moving averages
    • Use combination signals for longer trend confirmation
    • Backtest the multi-moving average strategy for validation
    • Watch for alignment or divergence among the different averages
    • Apply the strategy to identify entry points during sustained trends
    • Work with a trading platform to ensure accurate moving average settings
    • Manage risk by varying trade sizes based on strategy signals
    • Consider practising on a demo account before going live
    • Monitor strategy effectiveness and iterate based on feedback
    • Incorporate news events analysis to predict potential trend shifts
moving-averagesbinary-optionstraderanalysttrading-teamrisk-management-team
Implement these strategies

Strategies and tactics for implementing a Nifty options short strategy based on open interest

  • ⛳️ Strategy 1: Analyse open interest patterns

    • Identify the Nifty options with the highest open interest
    • Monitor changes in open interest and price movement daily
    • Evaluate the correlation between open interest increase and potential market direction
    • Use historical data to identify patterns in open interest and price behaviour
    • Focus on expiration periods where open interest and volatility tend to spike
    • Assess market sentiment using open interest contributions from calls and puts
    • Incorporate technical indicators to support open interest findings
    • Review news and market events that may affect open interest trends
    • Set alerts for significant open interest changes
    • Regularly document findings and revise the strategy based on outcomes

  • ⛳️ Strategy 2: Implement risk management protocols

    • Define acceptable levels of risk and set positions accordingly
    • Set clear stop-loss levels based on technical analysis
    • Utilise trailing stops to protect gains and limit losses
    • Diversify positions to reduce exposure to a single option
    • Employ position sizing techniques to control capital allocation
    • Establish a maximum loss threshold per trade
    • Use delta hedging strategies to mitigate directional risk
    • Regularly review and adjust risk management rules
    • Monitor market conditions for increased volatility that might affect risk
    • Ensure strict adherence to predefined risk protocols at all times

  • ⛳️ Strategy 3: Optimise entry and exit strategies

    • Identify optimal entry points using open interest peaks and troughs
    • Use technical analysis to refine entry and exit timing
    • Monitor bid-ask spreads to ensure efficient trade execution
    • Identify key support and resistance levels for exits
    • Adjust positions based on changes in open interest dynamics
    • Use time decay (theta) to benefit from Nifty option decay
    • Plan exits around Nifty's earnings reports or market events
    • Backtest the strategy to ascertain optimal entry and exit points
    • Document each trade to evaluate strategy success and refine it
    • Be prepared to adjust the plan based on real-time market feedback
open-interestshorting-strategytraderrisk-analysttrading-teamrisk-management-team
Implement these strategies

Strategies and tactics for implementing Smart Money Concepts in Trading

  • ⛳️ Strategy 1: Utilise Market Structures and Order Blocks

    • Analyse internal market structure to identify potential reversal points
    • Monitor Bullish and Bearish Order Blocks to anticipate market turns
    • Focus on mitigation methods like High/Low for precise trade entries
    • Set alerts for BOS and CHoCH to capture market structure shifts
    • Incorporate historical analysis of swing structure to enhance predictions
    • Use ATR as a volatility filter to detect significant order blocks
    • Implement confluence filters to prioritize significant structure breakouts
    • Utilise colour-coded candle analysis to assess current trends visually
    • Apply sensitivity thresholds to detect pertinent equal highs and lows
    • Conduct regular audits of past trades to refine order block strategies

  • ⛳️ Strategy 2: Implement Fair Value Gap Strategy

    • Identify Fair Value Gaps using defined thresholds and timeframes
    • Utilise visual indicators like rectangles to mark these gaps on charts
    • Set automated alerts for the formation of bullish and bearish gaps
    • Apply a timeframe change filter to detect gaps with significant price shifts
    • Use real-time analysis of Fair Value Gaps to inform immediate trading decisions
    • Extend gap boxes to visualize long-term market trends
    • Incorporate cumulative mean range as an alternative volatility measure
    • Prioritize gaps in high-interest market periods for higher significance
    • Backtest Fair Value Gap strategies to evaluate past market performance
    • Integrate Fair Value Gaps into a broader strategic framework with additional indicators

  • ⛳️ Strategy 3: Leverage Multi-Timeframe and Zone Analysis

    • Utilise multi-timeframe analysis to find stronger market levels
    • Highlight daily, weekly, and monthly highs and lows on charts
    • Evaluate premium, discount, and equilibrium zones to identify entry and exit points
    • Draw zones with distinct labels and colour coding for quick identification
    • Avoid higher timeframe zones for more precise trading in lower timeframes
    • Identify equilibrium points by calculating average highs and lows
    • Track trailing extremities to maintain updated support and resistance levels
    • Deploy different line styles to differentiate between timeframe zones
    • Perform regular checks for confirmations from higher timeframes
    • Study correlation between trailing swings and price movements for strategic refinements
market-structureorder-blockstradermarket-analysttrading-teamanalysis-team
Implement these strategies

Strategies and tactics for expanding Sterling Tour and Travel Agency into the Kenyan Market

  • ⛳️ Strategy 1: Forge strategic partnerships

    • Identify and partner with a medium-sized Kenyan tour and travel agency
    • Leverage the local partner’s market knowledge and customer base
    • Align services to meet local cultural and tourist preferences
    • Ensure clear communication channels with partners
    • Negotiate mutually beneficial terms in partnership agreements
    • Engage local travel influencers to promote joint offerings
    • Create co-branded marketing materials with local partners
    • Host joint events and travel expos to increase brand visibility
    • Develop shared objectives and performance metrics
    • Regularly review and refine partnership strategies

  • ⛳️ Strategy 2: Adapt services to local market conditions

    • Research and understand customer preferences in Kenya
    • Develop Kenya-specific travel packages including popular destinations
    • Implement a pricing strategy that reflects local purchasing power
    • Offer flexible payment options tailored to Kenyan market needs
    • Launch culturally immersive experiences like safaris and heritage tours
    • Translate marketing materials into Swahili and other local languages
    • Align services with environmental and cultural preservation initiatives
    • Conduct training sessions for employees on local customs and practices
    • Incorporate feedback from local customers into service offerings
    • Regularly update offerings based on seasonal tourist trends

  • ⛳️ Strategy 3: Enhance marketing and brand awareness

    • Launch social media campaigns targeting Kenyan travellers
    • Partner with local influencers to widen digital reach
    • Participate in local and international travel expos
    • Utilise radio and print media to reach different demographics
    • Highlight local partnerships in marketing communications
    • Develop emotional and engaging storytelling content
    • Create promotional videos showcasing Kenyan attractions
    • Establish a customer referral programme
    • Leverage customer testimonials in marketing materials
    • Conduct surveys to measure brand awareness and adapt strategies
partnershipslocalizationstrategic-plannermarketing-specialistmarketing-teambusiness-development-team
Implement these strategies

How to track your Options Trading strategies and tactics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

More strategies recently published

We have more templates to help you draft your team goals and OKRs.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

Table of contents
Copyright © 2024 Tability