Options Analysis Skill

Workflow Checklist

Copy and track progress:

code

Options Analysis Progress:
- [ ] Step 1: Define options objective and constraints
- [ ] Step 2: Gather options chain and underlying context
- [ ] Step 3: Price contracts and compute Greeks
- [ ] Step 4: Analyze strategy payoff and risk profile
- [ ] Step 5: Provide execution and risk-management guidance

Step 1: Define Objective and Constraints

Confirm user intent first:

•Directional speculation, income, hedge, or event play
•Time horizon and risk budget
•Max acceptable loss and capital usage

Specify candidate structures:

•Single-leg call/put
•Vertical spread
•Covered structure or protective hedge

Step 2: Gather Chain and Underlying Context

Use financial_research to retrieve:

•Underlying spot price and recent volatility behavior
•Full options chain for relevant expiries
•Strike, bid/ask, implied volatility, open interest, volume

Use financial_research news/event context (earnings, macro dates) to frame volatility regime and gap risk.

Step 3: Price Contracts and Greeks with quant_analysis

Use quant_analysis price_option to estimate theoretical value and Greeks:

•Delta
•Gamma
•Theta
•Vega
•Rho (if rate sensitivity matters)

Compare theoretical values with market mid prices:

•Identify potential overpricing/underpricing zones
•Flag wide-spread or low-liquidity contracts

Use scenario sweeps for underlying price and implied volatility shifts.

Step 4: Strategy Payoff and Risk Analysis

For each candidate strategy, compute:

•Max gain, max loss, breakeven
•Net premium and capital at risk
•Sensitivity to time decay and volatility crush

Build payoff diagrams across price outcomes at expiry and, when useful, intermediate checkpoints.

Evaluate risk under adverse scenarios:

•Fast move against position
•IV collapse after event
•Liquidity deterioration near expiry

Step 5: Execution and Risk Management Guidance

Convert analytics into practical guidance:

•Preferred strikes/expiries based on objective
•Position size suggestion tied to risk budget
•Exit rules for profit-taking and stop conditions

Include operational safeguards:

•Avoid low-open-interest contracts when possible
•Respect bid/ask slippage in expected return
•Re-evaluate Greeks after large underlying move

Close with a concise decision table: best candidate, rationale, key risks, and conditions that invalidate the setup.