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Appendix · 4 min read

Appendix A: Strategy Selection Decision Tree

"There is no 'right strategy' — only strategies that match _conditions."_

The tree below answers the question "given my view, what should I open?" It is guidance, not law — your journal will eventually refine it for your own setups.

Master Decision Tree

diagrams/decision-trees/master-tree

Stock Ownership and Income Strategies

diagrams/decision-trees/stock-relationship

Expiration Selection Sub-Tree

diagrams/decision-trees/expiration-tree

If your view horizon does not match a clear expiration regime, the trade does not yet exist. Match expiration to horizon plus a buffer. See Chapter 11 for the full framework.

IV Rank → Preferred Strategy Mapping

IV Rank Strategies that work well Strategies to avoid

< 30 (low)

Long options, calendars, debit spreads

Credit spreads (premium too thin)

30-60 (moderate)

Most strategies workable

Extreme high-IV or low-IV plays

> 60 (high)

Credit spreads, condors, short premium (with risk-defined wings)

Long premium (paying for elevated IV)

> 90 (extreme)

All premium-selling strategies (potential crisis signal)

Long premium (fire-sale fee)

The "Pass" Tree — When Not to Trade

diagrams/decision-trees/pass-tree

The default state of a sound options account is no position. Trades are opened in response to specific signals, not in response to boredom, market hours, or the urge to act. Most days, the right answer is to manage what you have and not open something new.