Options Execution

Methodology fused from professional options trading frameworks; all text is an original paraphrase.

Defaults

Preflight

Run canonical pre-flight per contracts/preflight.md. Include the X-Agentii-Trace header on every tool call per contracts/x-agentii-trace-header.md — carry the _run_id from your first tool result and name yourself (and your parent, if you were spawned).

Data Source Priority

1. Options execution framework — references/options-strategies.md (bundled strategy reference)
2. Upstream context — market structure from price-action + pattern identification from chart-patterns
3. Options setups — search_technical_setups(instrument_scope=["option"], ...) for matching against gold.technical_setups

Methodology

Retrieval Scope

structured_only

Retrieval Strategy

This skill follows Branch (d) Simple Lookup from contracts/retrieval.md: the strategy framework is bundled in references/options-strategies.md. Real-time data via get_realtime_quote. Matched options setups via search_technical_setups(instrument_scope=["option"]). No unstructured document retrieval.

Temporal Scope

See frontmatter temporal_scope block.

Tool Allowlist

See frontmatter allowed_tools.

Protocol

This skill implements a professional options execution framework. Options are treated as execution tools for expressing directional or volatility views with defined risk — not as standalone gambling instruments. The framework applies three mandatory filters (liquidity, cost, volatility) before any strategy selection. Detailed strategy definitions, the strategy→market condition matrix, and execution rules are in references/options-strategies.md.

Step 1 — Macro and Volatility Context

1. Assess broad market volatility via VIX or equivalent from get_realtime_quote.
2. Classify IV environment: High IV (> 70th percentile) → favor premium-selling strategies. Low IV (< 30th percentile) → favor premium-buying strategies. Mid-range → balanced.
3. Macro regime from upstream analysis: expansion favors longs, contraction favors shorts; high uncertainty favors straddle/strangle.

Step 2 — Directional Thesis Input

1. Receive Always In direction from price-action skill.
2. Receive primary pattern and confidence level from chart-patterns skill.
3. If no upstream context: derive from raw price data and fundamental thesis.
4. Classify thesis: Bullish / Bearish / Neutral / Direction-uncertain-large-move-expected.

Step 3 — Strategy Selection

Apply the strategy matrix to select the appropriate options structure:

1. Apply filters: Check liquidity (bid-ask spread), cost (premium vs position), IV environment.
2. Map thesis to strategy: Use the strategy→condition matrix in references/options-strategies.md.
3. Query pipeline setups: search_technical_setups(instrument_scope=["option"], pattern_type=<derived>) for matching strategy setups from gold.technical_setups.
4. Load full setup: get_technical_setup(setup_id=<best_match>) for exact parameters.
5. Fallback: Use manual strategy rules from the reference.

Step 4 — Execution Plan

1. Strike selection: OTM for directional (delta 0.40-0.60), ATM for straddles, OTM for strangles.
2. Expiry selection: 45-60 DTE for buying strategies, 30-45 DTE for selling strategies.
3. Position sizing: Risk/contract ≤ 2% of capital. For selling strategies, size on notional exposure.
4. Exit plan: Profit target, time stop (21 DTE for buys), stop loss level.
5. Invalidation: Conditions that void the trade (thesis break, IV regime change, liquidity deterioration).