These pages explain the measures and screening rules that a disciplined options workflow is built on, in plain English. Each article opens with a direct answer, then goes into the mechanics. They describe how the numbers work and how Optionscanner computes them; what to trade, and whether to trade at all, always remains the reader's own decision. Three places to start: implied vs realized volatility, the measure the screen reads before IV rank; what a credit spread is, with a worked example; and the options profit calculator, which prices any trade with up to eight legs.
Credit and debit spreads, condors, calendars, the wheel and LEAPS: how each structure is built, what it pays, and what it risks.
A credit spread sells an option and buys a further-out one, collecting premium up front and profiting when the stock stays away from the short strike. A debit spread pays premium for a defined-risk directional position. Rule-based disciplines pick between them from two inputs: the directional signal and whether implied volatility is rich or cheap.
An iron condor sells an out-of-the-money put spread and call spread on the same expiration, profiting when the stock stays inside the short strikes. Because the structure has no directional opinion, the entry screening carries the entire edge: the volatility premium gate decides whether the trade is being paid enough to exist.
An option's delta approximates the market-implied probability that it finishes in the money. Placing a credit spread's short strike inside a 0.15-0.30 delta band keeps the implied odds of the strike being breached between roughly 15% and 30%, balancing premium collected against how often the position gets tested.
Expiration choice trades decay against risk. Time decay accelerates as expiration approaches, but so does gamma, the speed at which a position's directional exposure changes. The 30-45 days-to-expiration window is the classic compromise for premium selling: meaningful decay, gamma still manageable, and time to adjust when a strike is tested.
The wheel is a recurring income cycle: selling a cash-secured put collects premium; if the stock is assigned, selling covered calls against the shares collects more premium; if the shares are called away, the cycle restarts. Its discipline lives in two rules: only running it on stocks worth owning at the strike, and never selling a call below the shares' cost basis.
Evaluating a credit spread is a fixed sequence of checks, each answering one question: is the volatility rich enough to sell, is the short strike far enough away, can the position be exited, does an event span the trade, is the credit adequate for the width, and does the worst case fit the account. A candidate that fails any single check fails the evaluation.
A credit spread's exit rules are set at entry, not improvised later: close at a fixed fraction of the credit collected (commonly 50%), exit by around 21 days to expiration, and stop the loss at a multiple of the credit (commonly 2x). Mechanical exits exist because the final weeks hold the least remaining reward and the most gamma risk.
A roll closes an existing option position and opens a related one further out in time, sometimes at a different strike, in one net-priced order. Done well, it extends a thesis that needs more room while collecting additional premium; done reflexively, it converts a small realized loss into a larger deferred one.
Defined-risk options structures make honest sizing possible because the worst case is a known number at entry. A sizing discipline caps that worst case per position (a few percent of capital), caps the sum of worst cases across open positions, and normalizes contract counts by each stock's actual volatility so risk per position is comparable.
A calendar spread sells a near-dated option and buys a longer-dated one at the same strike, paying a net debit. It profits when the near option decays faster than the far one loses value, which makes it a trade on the volatility term structure: richest when near-dated volatility is expensive relative to far-dated.
LEAPS are options with roughly a year or more to expiration, used to express multi-month directional theses with a fraction of the capital of stock ownership. The standard convention runs deep in the money, around 0.70-0.75 delta, where the option behaves mostly like stock and time decay is gentlest per day.
Both sell a put and both profit if the stock stays above the strike. A cash-secured put collects more premium and sets aside the cash to buy the shares, so its risk runs down to a stock price of zero. A put credit spread buys a lower put, which caps the loss at the width minus the credit and ties up far less capital, at the cost of a smaller credit and no path to owning the shares.
An iron condor is tested when the stock approaches one short strike. The worst case is unchanged, the wider wing's width minus the total credit, but its probability has risen. The responses are closing the whole condor, closing or rolling only the tested side, rolling the untested side closer for more credit, or holding to a pre-set stop; each changes the risk in a specific way, and the decision rule is best set before entry.
A credit spread is tested when the stock approaches or crosses the short strike with time remaining. The defined worst case has not changed, and the position has four mechanical paths: holding while the exit rules stay unbreached, closing at the loss stop, rolling out for a net credit, or adjusting the untested side. Each has exact, knowable consequences; panic is the only path without them.
Delta bands, probability of profit, expected move, credit-to-width and the other figures the desk computes, with what each can and cannot tell you.
Probability of profit is the market-implied chance that a position finishes above breakeven at expiration, computed from the option chain's own prices. It is a model-based estimate under the market's implied distribution, not a promise, and it says nothing about how large wins or losses are.
The greeks measure an option position's sensitivity to the things that move it: delta to the stock price, gamma to delta itself, theta to time, vega to implied volatility, and rho to interest rates. Reading a position through its greeks turns 'what is this trade' into 'what has to happen for this trade to work'.
Dealer gamma exposure estimates the aggregate hedging position of options market makers from chain open interest. In a positive-gamma regime dealer hedging leans against moves, dampening them toward mean reversion; in a negative-gamma regime hedging chases moves, amplifying trends. The estimate is a context signal for index products, not a trade signal.
Assignment is the short option holder's side of exercise: the seller of a put buys 100 shares per contract at the strike, the seller of a call delivers them. United States equity options are American-style, so assignment can arrive any day, but it becomes likely only when the option's remaining time value falls below what the holder gains by exercising.
An options liquidity screen answers one question: can this position be exited at a fair price when exiting matters? The practical screen has three parts: minimum open interest at the traded strikes, minimum daily volume judged against how much of the session has elapsed, and a ceiling on bid-ask width as a fraction of the mid price.
A breakout base is a consolidation whose internal behavior is consistent with accumulation rather than distribution: the stock holds near its highs after a strong prior run, each pullback is shallower than the last, price volatility contracts, and volume dries up. Each element is measurable, which turns a chart pattern into a checklist.
A composite signal score blends several technical indicators, each voting within a bounded range, into one number, for example -5 to +5. The composite exists because single indicators fail in known, different ways; requiring agreement across families of evidence filters out most of each indicator's false positives.
A price cone projects the options market's expected move forward through time: from today's price, the band widens with the square root of time at the pace implied volatility sets. Roughly two-thirds of outcomes are priced to finish inside the cone at any horizon; strikes and breakevens drawn against it show a structure's position in probability terms.
Position greeks do not add honestly across different stocks: a share of delta in a staid utility and in a volatile semiconductor name are different exposures. Beta-weighting converts every position's delta into equivalent units of one reference index, making the portfolio's net directional exposure a single meaningful number.
A stock's price is expected to drop by roughly the dividend on the ex-dividend date, and option prices embed that drop in advance: calls on dividend payers price lower and puts higher. The sharpest practical effect is early assignment risk on short in-the-money calls the day before ex-dividend, when the dividend exceeds the call's remaining time value.
Implied against realized, IV rank and percentile, term structure and skew, and the regimes that change how premium should be read.
IV rank places today's implied volatility between its 52-week low and high on a 0 to 100 scale; IV percentile counts the share of the past year's days on which IV was lower. Both ask whether premium is high or low for this particular stock, and after a single volatility spike they can disagree sharply, because the spike stretches the rank's range for a year.
The net volatility risk premium (NVRP) measures how much more the options market charges for volatility than the stock has actually delivered: (ATM implied volatility minus realized volatility) divided by realized volatility. A positive NVRP means options are priced above the stock's recent movement; a negative NVRP means the market is charging less than the stock has been moving.
The VIX index expresses the market's 30-day implied volatility for the S&P 500. Banding it into regimes gives context for premium selling: below 15 is complacent, 15-20 normal, 20-25 elevated, 25-30 fear, and above 30 panic, where premium is richest but position sizing discipline matters most.
VIX term structure compares implied volatility across horizons: 9-day, 30-day, 3-month, and 6-month. In calm markets the curve slopes upward (contango). When short-dated volatility prices above long-dated (backwardation), the market is paying up for immediate protection, which historically marks stress.
Volatility skew is the pattern of implied volatility across strikes at one expiration. Equity options normally price downside puts above upside calls, a persistent asymmetry born of crash demand; the information is in deviations from the usual shape, which research links to the direction of subsequent moves.
Credit spread, iron condor and covered call screens: the gates each candidate passes, the default thresholds, what a reject logs, and what is out of scope.
Optionscanner's credit spread screen runs every candidate through the same gates: a volatility premium floor, a short-strike delta band, an expiration window, liquidity on the short strike, a credit-to-width floor, an earnings check and placement against the recent trading range. Every threshold is a setting you can read and change, and a rejected candidate is logged with the gate it failed and the number it failed by.
Optionscanner selects an iron condor when a stock's signal is neutral and the volatility being sold is rich or neutral, then screens it like two credit spreads at once: each wing passes the delta, liquidity and placement gates, the expiration avoids earnings, and the total credit clears a floor relative to the wider wing. Rejections are logged with the gate and the number.
Optionscanner's covered call screen starts from the shares you actually hold at your connected brokerages, counts whole 100-share lots per account, subtracts calls already written against them, and scans strikes for the uncovered lots, never below your average cost. The wheel side screens cash-secured puts around the 0.25 delta, 30 to 45 day convention, and tracks each position through the cycle.
How a candidate is evaluated step by step, how positions are monitored, and how outcomes are audited against forecasts.
Paper trading validates process: whether entry rules fire as designed, whether exits execute, whether the discipline survives contact with real market hours. It systematically flatters economics, because simulated fills skip the bid-ask cost every real order pays. Both facts are useful as long as neither is mistaken for the other.
A trade journal becomes an instrument when every position records its entry state (the measures that justified it) and its labeled outcome. That dataset supports the two audits that improve a discipline: calibration, comparing forecast odds against realized results, and behavioral analysis, finding the patterns in one's own decisions.
Meta-labeling, from López de Prado's work on financial machine learning, splits trading into two models: a transparent primary (the rules engine) that decides what qualifies, and a learned secondary trained only on the primary's own outcomes, estimating the probability each qualifying trade wins. The secondary filters; it never originates.
Options orders are limit orders in wide, negotiated markets, so execution quality is a real edge component: the difference between filling at the mid and filling near the far side of the quote is often a meaningful fraction of a spread's whole edge. Discipline means pricing from a fresh mark, moving in measured steps, and measuring the results.
A trading plan is a short list of rules decided before any trade: what qualifies an entry, how much is risked, when a position is closed, which events are avoided, and how results are reviewed. This template lists each rule as a blank to fill with a number, with the common published values beside it, so the plan can be checked mechanically on every trade.
Starting with options goes best in a fixed order: learn what calls, puts and the Greeks measure; understand the approval level a broker grants; begin with defined-risk structures whose worst case is known at entry; paper trade a written plan; size every real trade from its maximum loss; and review results against the odds priced at entry before scaling up.
One page per engine component, from the conviction score to the exit rules: what goes in, how it is weighted, where every threshold sits, and what the number cannot tell you, quoted from the code as deployed.
The conviction score is a 0-100 number built from two layers. The signal layer measures the directional case from the chart: composite signal strength, its confidence, trend-regime agreement, an RSI check, and a volume and relative-strength adjustment. The options layer measures whether the options market pays for that case: the expiration score, the implied-versus-realized volatility regime, the probability of profit of the chosen spread, and decay per unit of volatility risk. An earnings penalty is subtracted, the total is clamped to 0-100, and letter grades sit at 90, 75, 60 and 45.
Structure selection is a lookup, not a judgment. The directional signal (buy, sell or hold) and the volatility regime (rich, neutral or cheap, from the ratio of implied to realized volatility) index a fixed matrix that names one structure: a bull put spread, a call debit spread, a bear call spread, a put debit spread, an iron condor, or a long straddle or strangle. A VIX regime layer then annotates the pick with a lean toward credit structures when the index is elevated and a smaller-size note in panic, without changing the matrix result.
NVRP, the normalized volatility risk premium, is (implied volatility minus realized volatility) divided by realized volatility. Optionscanner computes it from at-the-money implied volatility and a realized-volatility window matched to the option's days to expiry, flags readings below 0 as CHEAP_VOL, 0 to 0.10 as FAIR and 0.10 and above as PREMIUM, and adds a z-score against the stock's own trailing history so that a static threshold means the same thing on a quiet utility and a volatile chip maker. The paper trading agent requires 0.10 or more to enter a credit spread.
Probability of profit is computed under a log-normal model of the stock at expiry: the chance that price finishes on the profitable side of the breakeven, N(d2) or N(-d2) in Black-Scholes terms, using the strike's own implied volatility. Two refinements sit beside it. A smile-slope correction adjusts for the fact that implied volatility changes with strike, and a probability of touch estimates the chance the short strike is reached before expiry, which is the number that matches an exit process that closes at a loss multiple rather than waiting for expiry. A standing calibration report then compares predicted probability with realized win rate.
The expiration optimizer scores every available expiry for a ticker on five dimensions of up to 20 points each: how close the days to expiry sit to the 30-45 day band with a peak at 37, the implied volatility level, the shape of the term structure at that expiry, gamma risk measured as expected delta drift on a one-standard-deviation day, and decay per unit of volatility risk. Three of the five invert by side: sellers score rich volatility, a front-month peak and high decay highest, buyers score the opposite. A standard monthly within a small margin of the top weekly is promoted, and earnings inside the window adjust the score by side.
Tape fit answers a question delta cannot: where the short strike sits relative to the range the stock has actually traded. It blends three components into one 0-100 subscore. Placement, half the weight, measures how far outside the recent trading box the short strike sits as a fraction of spot. Patterns, 30 percent, checks whether a triggered chart pattern opposes the trade, and zeroes the component when a measured-move target breaches the short strike. Regime, 20 percent, favors a ranging tape for premium selling and a trending one for debit trades. A negative dealer-gamma regime caps the regime component for credit trades.
The paper trading agent does not ask a model whether to trade. Its confidence score is a deterministic weighted blend of seven auditable subscores, liquidity, volatility regime, structure fit, event risk, portfolio fit, tape fit and directional bias, with weights that sum to one. A set of blocking flags, such as an earnings date before expiry or a bid-ask spread wider than the limit, forces a reject regardless of the blend. A candidate below 50 is journaled and rejected, one at 75 or above sits in the approve band, and everything between waits for a human. Full automation exists only on paper; in a production account every order needs a click.
Optionscanner does not decide when a position closes; the user's adopted rule set does, and every verdict on a card names the rule and the value that tripped it. One engine pairs option legs into spreads, then checks each position against the adopted thresholds: a share of maximum profit earned, a share lost, days to expiry, short-strike delta drift, an earnings date inside the holding window, and whether a roll to the next expiry pays a net credit. The Balanced template reproduces the thresholds the app used before rule authorship existed: 50 percent profit, 100 percent of maximum profit lost, 21 days to expiry, delta 0.45.
Earnings and other dated catalysts: what the options price, what history shows, and how the calendar changes a trade.
The at-the-money straddle expiring just after earnings prices the market's expected move for the event: a $10 straddle on a $200 stock implies roughly a 5% move in either direction. Rule-based disciplines treat earnings as a first-class event: undefined-outcome dates get screened, not predicted.
Honest, feature-based comparisons with Unusual Whales, Market Chameleon, OptionStrat, Barchart and Option Samurai, a category guide to the kinds of options scanners, and what AI does and does not do inside these tools.
Manual screening and screening software apply the same criteria; the differences are coverage, consistency, and record-keeping. Software evaluates every ticker against every rule on every scan and logs why each candidate passed or failed. What software cannot do is decide what to trade: the judgment, and the decision, stay with the trader.
A screening tool computes and describes: it evaluates market data against criteria the user configured and reports what passed, what failed, and by how much; nothing in that output is investment advice. A registered investment adviser, by contrast, directs: tells a specific client what to do with their money. The line is functional, not cosmetic, and it decides who is responsible for the decision.
Unusual Whales is built around order-flow data: unusual options activity, sweeps, dark-pool prints and alerts, plus community and news features. Optionscanner is built around a rules engine: it screens a universe against criteria you can read and edit, checks your positions against exit rules you adopt, and runs a paper-first agent, with every number's inputs on screen. The two answer different questions, and some traders use both.
Market Chameleon is an analytics and data product: deep per-ticker options statistics, earnings-move history, implied-volatility analytics and many screeners. Optionscanner turns a smaller set of analytics into a workflow: criteria you adopt, a trade built on a chart, positions checked against your exit rules, and a paper-first agent, with the methodology published. One is wider; the other is a process.
OptionStrat is a strategy builder and visualizer: pick any structure, see the payoff diagram and the Greeks, and browse flow. Optionscanner also builds and draws a trade, but arrives at it through rules you adopt, then monitors the resulting position against your exit rules and can run the process on paper. One is a precise drawing tool for a trade you already have in mind; the other is a process that produces and then watches the trade.
Barchart is a broad market-data platform whose options screeners cover the whole market with many filters, alongside stocks, futures and news. Optionscanner is a narrower, deeper workflow: criteria you adopt, a graded setup, a trade on a chart, positions judged by your exit rules, and a paper-first agent. Breadth of data on one side, a process with its arithmetic shown on the other.
Option Samurai is a market-wide options scanner: pick a strategy, set filters, and it searches every US optionable stock for setups that match, with ready-made scans and alerts. Optionscanner screens a smaller universe through rules you adopt, then keeps working after entry: it checks open positions against your exit rules, places orders through your own brokerage after a preview, and can run the process on paper. One is the widest net for finding a setup; the other is a process that selects, places and watches it.
Options scanners are not one category. Flow trackers watch what is trading; analytics sites go deep on a name; strategy builders draw a trade; market-wide screeners filter everything; rules engines run a written process and monitor the result. This guide describes each kind, names representative products including our own, and lists the questions that tell you which kind you actually need.
AI in options tools mostly does three things well: explains numbers in plain English, summarizes news and filings, and offers a second opinion on a setup. The decisions that matter, which candidates pass, which strikes, when to exit, are still rules and arithmetic in every tool worth using, and the way to judge a product is to ask which of its numbers the AI is allowed to change. In Optionscanner the answer is none.
Each calculator runs entirely in the browser on numbers the reader types in: no login, no account, no market data feed. The prose around every widget explains the formula, walks a worked example, and names the assumptions, because a number whose model is hidden is a number that cannot be judged. Deeper treatments of each concept live in the Learn library.
Free expected move calculator: stock price, implied volatility, and days ahead produce the one and two standard deviation price ranges the options market is pricing.
Free credit spread calculator for bull put and bear call spreads: max profit, max loss, breakeven, return on risk, credit-to-width and model probability of profit.
Free debit spread calculator for call debit and put debit spreads: max profit, max loss, breakeven, reward to risk and model probability of profit at expiration.
Free probability calculator for options: the log-normal model probability that a stock finishes above or below a chosen level, the same family of arithmetic behind POP displays.
Free options profit calculator for calls, puts and spreads: see profit or loss at any price and date, breakevens, max loss and the chance of profit in plain English.
Free position size calculator for defined-risk options trades: account equity, a per-trade risk budget, and the maximum loss per contract produce the contract count that fits the budget.
Three independent literature reviews of the Optionscanner engine against roughly 340 published sources: what the evidence supported, where the engine was wrong, and what changed.
A 130-source literature review of the Optionscanner engine: where the volatility-premium core matched published evidence, four places it did not, and the fixes shipped in v3.96.0.
A 90-source review of chart patterns, expiration selection, the conviction engine, and probability of profit: what held up, what did not, and the v3.97.0 fixes.
A 120-source review of the automated agent's order lifecycle against SEC 15c3-5, MiFID II RTS 6, FIX-era engineering standards, and the human-oversight literature, and the v3.98.0 fixes.
Short video walkthroughs of the platform, two to three minutes each, every one with its full transcript on the page.
An analytics and journaling desk for self-directed options traders. This video covers what the platform computes for you, and the lines it deliberately does not cross: it is not a broker, not an investment adviser, and it decides nothing. You connect your own brokerage account, bring your own market data, and make every decision yourself.
A walkthrough of linking a brokerage account, including the authorization disclosure, what permissions you are granting, and how to revoke access. Approval happens on your brokerage's own page under your own login. Recorded against a paper account.
The one screen to read before the open: the volatility regime, scheduled event risk, anything waiting on your approval, the overnight pattern scan, your watchlist signals, and the companies reporting this week.
How to read the morning pattern scan: what it covers, why only live setups appear, and what the direction chip, the status, the reward-to-risk badge and the thirty day expected-move pill each tell you before you act on anything.
How to narrow a universe of thousands of names down to a handful worth reviewing: choosing a universe, reading the signal score and the volatility columns, using the three presets, and moving from a scanner row into a full trade plan.
Eight chart-pattern detectors on one ticker's daily tape, with volume, moving averages and momentum. Covers the lifecycle chip that says whether a pattern is forming, triggered, whipsawing or already failed, why a failed break flips direction, and how targets are scaled rather than taken at textbook full height.
The conviction composite scores a setup from zero to one hundred by combining a directional read with an options-market read. This video walks the breakdown behind the letter grade, what the machine learning chip beside it means, and why the two disagreeing is useful information.
How the trade plan picks a spread structure from the signal and the volatility regime, how the five scored expirations are ranked, and how to read the expected-move cone against your profit zone before deciding anything.
Thesis starts from your view rather than today's setup: a ticker, a direction, a horizon in months, and a structure. This walkthrough is narrated by the assistant while it drives the surface itself, showing the candidate spread, the expected-move ruler, the skew edge, and the earnings events inside the holding window.
Term structure, put-call skew, IV rank and NVRP explained on the surfaces that show them. Why an inverted term structure usually means the market knows something, and why IV rank alone is a poor gate for selling premium.
Where earnings dates come from and why the source matters, how to read an implied move whether you are buying or selling premium, and how the catalysts view surfaces dated events, analyst actions and material news inside a multi-month holding window.
The one surface with no scoring and no second opinion, built for traders who already know what they want. Single-leg chain browsing, multi-leg package building with server-computed max profit and loss, the paired-only rule that refuses naked shorts, and the preview-and-confirm path.
A single advisory view over open option positions across every connected brokerage, giving each one a hold, roll, close or hedge read with the arithmetic and specific strikes on the card.
The wheel modeled as a state machine: one lifecycle card per name, strike scanners for cash-secured puts and covered calls, a hard cost-basis floor on calls, roll prompts that require both price and time conditions, and broker reconciliation that never commits on its own.
How paper trading works in Optionscanner: logging a trade in one click with its entry context attached, live repricing on open rows, and the effectiveness breakdown on closed rows that shows which part of the toolchain is producing your results.
Reading closed trades back: four groupings that each answer a different question about your process, why the pattern digest is scoped to paper or real, and how broker-stamped rows keep the record honest.
The automation layer's first mode runs the complete pipeline and submits nothing, so you can read what it would have done against the market that actually happened. Covers reading a rejection, the six confidence subscores, the approve and review bands, and the veto-only invariant.
In semi-auto every entry and exit waits for a human click. This covers where waiting trades surface, what an approval card tells you before it asks, the gates and caps you configure, and why mechanical exits are never blocked by a protection.
Two ways a decision system can be wrong, and the surfaces that measure each. Grouping rejections by reason, applying a settings change through a server-clamped audited path, and reading the calibration report including which number to trust when two disagree.