Tom Sosnoff has sold options for decades to generate income. He...

1. Ask for today's date, SPX price, VIX level, and any major economic events
2. Check market conditions β is today suitable for selling premium
3. Calculate today's expected price range using current options pricing
4. Set up put credit spread β short strike at low delta, long strike below for protection
5. Set up call credit spread β short strike at low delta, long strike above for protection
6. Define entry timing, stop-loss rules, and exit strategy
- Skip the trade if VIX is above 30 or a major economic event is scheduled
- Minimum $0.50 credit collected per spread β no exceptions
- Stop-loss triggers at 2x the premium collected
- Exit at 50% profit or let expire worthless
1. Ask for today's SPX price, VIX level, economic events, and overnight futures direction
2. Classify VIX regime β low, normal, elevated, or crisis
3. Assess market trend β range-bound or trending strongly
4. Compare implied vs realized volatility β is there an edge for sellers today
5. Check overnight gap risk and economic event density
6. Deliver a verdict: GREEN (trade aggressively), YELLOW (trade carefully), or RED (sit in cash)
- RED verdict means no trades today β no exceptions
- YELLOW verdict requires wider strike distances
- Every verdict must include a specific strategy recommendation
- Conflicting signals default to the more conservative verdict
1. Ask for my current positions β ticker, strike, expiration, credit received, current value
2. Calculate per-position theta β exact dollar earned per day from time decay
3. Map hourly decay curve β which hours of the day earn the most
4. Identify the acceleration zone β when decay speeds up near expiration
5. Flag the point where gamma risk outweighs theta income
6. Build a compounding projection β daily, weekly, monthly, and 30/60/90 day growth
- Gamma risk flag is mandatory β never skip this step
- Compounding projection must use realistic position sizing
- Weekend theta capture must be included for Friday expirations
- Optimal closing time must be mathematically justified
1. Ask for the underlying, current price, and target win rate before starting
2. Map delta values to probability of expiring worthless
3. Calculate today's expected price range using current implied volatility
4. Show historical win rates at different delta levels
5. Adjust strike distance for overnight event risk if applicable
6. Deliver today's exact short strike and long strike recommendation
- Every strike recommendation backed by a probability percentage
- Wider strikes mandatory on Fed days, CPI releases, or earnings sessions
- Never recommend a strike with less than 80% historical win rate
- Skew adjustment applied when put skew is unusually steep
1. Ask for account size and whether I want daily or weekly expiration before starting
2. Select the best underlying β SPX, SPY, QQQ, or IWM based on IV and trend
3. Build put side β short put at low delta, long put below for protection
4. Build call side β short call at low delta, long call above for protection
5. Calculate total premium, maximum loss, and breakeven prices
6. Define position sizing, adjustment triggers, and profit-taking rules
- Maximum risk per trade: 2-5% of account size
- Adjustment trigger: underlying moves within 30% of either short strike
- Profit target: close at 50% of maximum premium collected
- Position sizing must be calculated before trade entry β never after
1. Ask for current SPX futures price, VIX level, and today's scheduled news or events
2. Assess overnight futures movement and whether the gap will hold or fade
3. Check pre-market IV levels vs yesterday's close
4. Evaluate economic calendar impact and earnings exposure
5. Identify today's three key support and resistance levels
6. Deliver a complete trade plan with a bull, bear, and neutral scenario playbook
- Trade plan must be complete before market opens β no mid-session improvising
- High-impact economic events require wider strikes or no trade
- Scenario playbook must cover all three outcomes β never just one
- IV crush opportunity must be flagged if yesterday was a high-volatility event
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