MASTER PRE-TRADE CHECKLIST

Direction & Thesis

[ ] Written thesis in hand

[ ] Counter-thesis (steel-man) considered

[ ] Setup checklist is completely met

Risk

[ ] Max loss defined and ≤ 2% of account

[ ] Monthly risk budget has room

[ ] Worst-case scenarios (gap, halt, IV crush) considered

Liquidity

[ ] OI ≥ 500

[ ] Daily volume ≥ 100

[ ] Bid-ask spread ≤ 5% of mid

IV and Volatility

[ ] IV rank known

[ ] Strategy aligned with IV environment

Calendar

[ ] No earnings inside expiry (or knowingly accept earnings)

[ ] No ex-dividend inside expiry (or managed)

[ ] FOMC/CPI/Jobs noted

Process

[ ] Opening note written

[ ] Profit-take level defined

[ ] Stop-loss level defined

[ ] Management triggers defined

Emotional

[ ] I am calm

[ ] My last loss was > 24 hours ago

[ ] No FOMO, no revenge

[ ] Other life areas are stable

[ ] Call vs Put difference clear [ ] Long vs Short asymmetry clear [ ] Four parts of an option named [ ] Per-contract = premium × 100 understood [ ] ITM/ATM/OTM defined [ ] American-style early-exercise risk understood

[ ] Can I name who is likely on the other side of this trade? [ ] Am I speculating while institutions hedge? (Frequently yes.) [ ] Is the trade consistent with the dealer-gamma regime I am aware of? [ ] If acting on "unusual options activity" — is it informational or hedging? [ ] Treating bid-ask spread as the price of liquidity, not a cost to fight?

[ ] Delta direction correct for my view [ ] Theta working for me or against (and acceptable either way) [ ] Vega exposure understood; IV environment compatible [ ] Gamma behavior near expiry anticipated [ ] For LEAPS, Rho considered [ ] Position-Greek totals match risk tolerance

[ ] OI > 500 on this strike/expiry [ ] Daily volume > 100 [ ] Bid-ask spread < 5% of mid [ ] IV rank known [ ] Intrinsic/extrinsic breakdown understood [ ] Liquidity supports closing, not just opening [ ] If small-cap or event-driven, justified reason

[ ] Max loss in dollars written down [ ] Max loss as % of account known [ ] Position is long / risk-defined / naked [ ] Margin call risk under volatility shock considered [ ] Worst-case (50% gap) loss survivable [ ] Loss survivable financially AND emotionally [ ] Max-loss matrix row memorized

[ ] Max risk ≤ 1-2% of account [ ] Monthly budget has room [ ] If lost, can I open the next trade? [ ] Correlated positions accounted for [ ] If rule is broken, written justification exists

[ ] Trade fits my archetype [ ] If not, written reason exists [ ] Not falling into my archetype’s known trap

[ ] Round-trip friction known [ ] Friction as % of target profit < 20% [ ] If spread > 5% of premium, this is justified [ ] Broker commission structure understood

[ ] Ex-dividend in expiry window? [ ] Earnings in expiry window? [ ] Halt-prone underlying? [ ] Weekend gap risk considered [ ] If short/naked, worst-case in dollars

[ ] Written directional thesis [ ] Strike + DTE + magnitude all feasible [ ] Premium ≤ 1-2% of account [ ] Earnings/dividend check [ ] IV rank check (>50 = paying premium) [ ] Profit-take (+50-100%) and stop (-50%) levels written [ ] DTE-14 plan in place

[ ] What is my view horizon? (Hours / days / weeks / months / years) [ ] Does the chosen expiration fit the horizon plus a buffer? [ ] Avoiding 0DTE unless experienced and systematic? [ ] If short premium: in the 21-45 DTE window or justified deviation? [ ] If long premium: budgeted theta over the expected hold? [ ] If LEAPS: budgeted vega mark-to-market swings? [ ] Aware of OPEX, quad-witching, FOMC, CPI, jobs windows? [ ] Chosen third-Friday monthly when liquidity > exact DTE?

Covered Call:

[ ] Willing to part with shares at this strike [ ] Strike at the profit-take point [ ] Ex-dividend in window? [ ] Earnings in window?

Cash-Secured Put:

[ ] Willing to own the stock at this strike [ ] Strike at the "happy to buy" price [ ] Position < 20% of account [ ] Earnings in window?

[ ] Long-term holder of the underlying? [ ] Annual premium cost acceptable in flat/up markets? [ ] For collar: willing to cap upside? [ ] IV elevated (expensive insurance) or compressed (cheap insurance)?

[ ] PoP ≥ 65% (credit) or clear thesis (debit) [ ] Max loss ≤ 1-2% of account [ ] IV environment matches structure [ ] Earnings / ex-dividend check [ ] Profit-take (50%) and stop (200% of credit) levels written

[ ] No earnings in near-term-leg expiry [ ] Long-leg IV not elevated to crush-risk [ ] Strike at expected "park point" [ ] Exit plan when short leg expires

[ ] Expected range plausible for time frame [ ] IV rank > 30 [ ] No earnings in expiry [ ] Profit target (25-50% of credit) written [ ] Wing-breach plan written [ ] Max loss ≤ 1-2% of account

[ ] IV rank appropriate (Long: <30, Short: >60) [ ] Earnings in window? (If yes, IV crush math done) [ ] Implied move known [ ] Historical actual vs implied compared [ ] For short: iron condor considered as alternative

VIX & Regime

[ ] Current VIX level identified (calm/normal/anxious/stressed/crisis) [ ] Term structure checked (contango or backwardation) [ ] My premium-selling activity matches the regime? [ ] My premium-buying activity matches the regime?

Portfolio Hedging

[ ] Beta-weighted portfolio delta computed [ ] Hedge budget written (1-3% / year) [ ] Reducing exposure considered instead of hedging [ ] Instruments suit the time horizon (puts for slow declines, VIX calls for spikes) [ ] Inverse ETFs NOT used as multi-week hedges [ ] Hedges bought in cheap-vol periods, not chased in expensive ones

[ ] Multi-year directional view [ ] Underlying liquid (LEAPS OI > 100) [ ] Spread < 5% of premium [ ] Delta 0.70-0.85 for stock replacement [ ] IV not elevated (vega regression risk) [ ] Vega mark-to-market budget in mind [ ] Plan for last 90 days

[ ] FOMO or planned? [ ] Last loss > 24 hours ago? [ ] Would I open this same trade today fresh? [ ] Can I articulate the bear case? [ ] Every setup criterion is met? [ ] Mind clear, sleep adequate, life stable?

[ ] Opening note written for this trade [ ] Have I read my journal today? [ ] How did the same setup perform last month? [ ] Emotional state in the "open trade" zone?

Safety marks (target: 6/6):

[ ] OI > 1000, spread < 5% of mid [ ] Large-cap or major-index underlying [ ] IV rank 30-70 [ ] DTE 30-60 [ ] Risk-defined structure [ ] Position size < 2%

Danger marks (target: 0/6):

[ ] Far OTM with < 7 DTE [ ] Long premium into earnings without IV math [ ] Illiquid underlying [ ] Naked short option [ ] Position size > 5% [ ] Multi-leg in illiquid name