Options Strategy

---
name: options-strategy
description: "Build and compare multi-leg option structures from a chain: iron condors, iron butterflies, call butterflies, vertical spreads both debit and credit including bull put and bear call spreads, straddles, strangles, covered calls, cash-secured puts, protective puts, and the two-expiry family of calendars, diagonals and ratio diagonals. Produces legs, breakevens, maximum gain and loss, reward to risk, model probability of profit, net position Greeks and an estimate of what the round trip costs at quoted spreads, then ranks every structure side by side. Use when the user asks what structure fits a view, what an iron condor would pay, which spread is better, what the breakevens are, how much a trade can lose, what a calendar or a diagonal or a ratio diagonal would do, or asks to compare strategies. Not for order placement and not for recommendations."
---

# Option strategies

Three commands. Build one structure, list what exists, or compare them all.

## Execution route

Prefer `option_strategy_build` to list or build structures and
`option_strategy_compare` to compare them. Use `option_chain_snapshot` first
when a fresh chain is needed. If the user has attached a CSV or JSON chain,
pass its path as `source_path` for a local file. For remote chat, pass its
content as `source_data` or `source_text`. Do not ask the user for it again.
If a matching MCP tool is not available, use
the `optiondesk` commands below. If neither MCP nor the CLI is available,
say that no fresh structure analysis can be produced; do not invent figures
or present example or remembered values as current.

## User-supplied data

Before you send data to the tool, ask the user to state that private analysis
is permitted. Then set `rights_confirmed` to true and name `data_source`.
The local desk does not gate on that name: any `data_source` is accepted,
so whether that provider's terms allow the analysis is the user's
responsibility (only the hosted service refuses Yahoo, yfinance and
personal Alpha Vantage data).

If the attachment fields are unclear, call `option_snapshot_schema`. Normalize
known column aliases, call or put notation, numeric commas, and clear percentage
units. Report the repairs from `normalization`. Never invent a missing spot,
expiry, strike, option type, quote, timestamp, or source. If a required value
is missing, ask only for that value.

The imported chain becomes a normal Option Desk artifact. Use its path for the
strategy, comparison, plots, positioning, Greeks, and the local dashboard.

## Data boundary

Use fresh provider data only when the tool reports that access is allowed.
A local Yahoo adapter also requires the personal-use acknowledgement. A
hosted tool must use a provider that is approved for public display, derived
outputs, storage, and MCP delivery. Never bypass a provider refusal. When no
approved tool is available, analyse a snapshot that the user supplied and
had the right to share. Otherwise, state that current figures are unavailable.

## Run it

```
optiondesk strategy --list                    # the playbook, as data
optiondesk chain SPY --from-file chain.csv --data-source "broker export" --accept-data-rights
optiondesk strategy iron_condor               # build one from the latest chain
optiondesk strategy --recommend 1 --vol-view crush
optiondesk compare                            # every structure, ranked
```

`strategy` takes `--snapshot PATH` to pick a chain, `--size` for contracts
per leg, and `--underlying-entry` for structures that hold the underlying.
`--recommend N` takes an outlook from -2 (strong bearish) through 0
(neutral) to +2 (strong bullish), with `--vol-view crush|expand|neutral`,
`--owns-underlying` and `--direction-unknown`.

`compare` builds every buildable structure from one snapshot and ranks
them. Add `--include-underlying` for covered calls and the like.

## The five-direction framework

Structures are organised by which of five outcomes they need, anchored on
the one standard deviation expected move: strong bearish, mild bearish,
neutral, mild bullish, strong bullish. Three of the five sit inside the
normal expected range and two are extreme. That is why a vertical spread
beats a naked long option for most views: it reaches maximum profit on a
normal move rather than needing an extreme one.

## Reporting rules you must follow

The ranking is by model expected profit per unit of capital at risk. Quote
the caveat with it, every time: expectations come from a lognormal model at
a single at-the-money volatility while the market prices each strike
differently, so a positive expectation largely measures that disagreement
rather than an edge.

A structure whose friction verdict is untradeable is excluded from the
ranking. Say so rather than presenting it as a candidate.

Premiums are mid quotes. They are not fills, and a real entry crosses the
spread on every leg. Maximum gain or loss may come back as the string
"unlimited", which is a fact about the structure and must never be
rendered as a number.

Nothing here is advice. Present structures as analysis of what a shape
would pay under stated assumptions, never as what the user should do, and
never recommend an entry, an exit or a size.
The full terms are in DISCLAIMER.md, which ships beside this skill when it
is installed from a package and sits at the repository root otherwise. The
substance is already above: research software, not advice, modelled numbers
that are not fills.

Cite the artifact path when reporting from it. The artifact is the record;
prose is a summary of it, and a number quoted without its source cannot be
checked later.

Read `degraded` before quoting anything. When it is true, give
`degraded_reason` first, in the same breath as the number rather than as a
footnote. Both fields are in the summary the command prints, not only in
the artifact.


## What an audit found in these numbers, and what to say about it

**A two-expiry maximum can be a property of the scan, not the structure.**
Calendars, diagonals and ratio diagonals have no closed-form maximum, so
the analysis scans a window around spot. When the payoff is monotone in the
trade's own direction the maximum lands on the window edge, and the figure
grows as the window widens: one live ratio diagonal reads 1.47 reward to
risk at a tenth of the width, 4.90 at the shipped width and 12.02 at two
and a half times it. Every plan now carries
`reward_risk_bounded_by_scan`, `max_gain_on_boundary` and `scan_range_sd`.
When the flag is true, say where the maximum sits: on the live pair the
edges are about ten standard deviations out, which is arithmetic rather
than a scenario.

**`delta_ratio` is a bound on the entry split, not a guarantee.** It was
documented for a while as the thing that keeps a large move uncapped. It is
not: one long against two short satisfies it at 0.76 and is a net short
call with unbounded loss. What keeps the move uncapped is holding more
back-month contracts than front-month ones, which the builder checks first.
Do not repeat the older claim.

**Every figure names the carry it used.** Plans carry `risk_free_rate` and
`dividend_yield` read from the chain rather than assumed. They matter: at
the module defaults instead of the measured values, three of the four legs
of a ratio diagonal land on different strikes.

## Going deeper

- `reference.md`: all twenty-three structures in a table with what each needs and when it pays, the five direction framework, the friction verdicts, and the fields that are not numbers.
- `workflows/choose-a-structure.md`: turning a view into a structure, and the rules for reporting one.