Is a Strategy Simply Covered Calls, Calendars, etc.?
Don’t confuse a spread type with an options trading Strategy.
Setups vs. Strategies at OptionAutomator
A setup is synonymous with an “option strategy” that you might see elsewhere. However, at OptionAutomator, we use the term “Setup” vs. “strategy” to avoid confusion with your Brutus Options Ranker Strategy.
A strategy consists of defining a Market Group and the associated Options Setups (spreads or single contracts) that you can use. This defines the alternatives that Brutus evaluates. Once you have your alternatives, your strategy will also need options criteria and/or stock criteria. These are the ideal parameters you’d like to see in a trade candidate. Finally, you will need to weight your strategy’s criteria before it’s complete and ready for ranking.
You may build your strategy from scratch, use a starting framework, or copy a fully complete strategy into your account for nightly ranking. Note that there is no limit to the amount of strategies that you can build or copy into your account. However, there is a limit on how many strategies you can set to “live” and enable for ranking at any given moment.
Navigating to Your Strategy List
It’s quite simple to get to your Strategy List from anywhere in the application. From any page in the app, simply click on the “Strategies” button in the left menu. This will take you to the strategy screen as shown below.
If you are using Brutus for the first time, of course, your strategy page will not look like those on this page; instead Brutus will present you with help tips to get you started.
Don’t fear the blank strategies page, there are many pre-defined strategies that are built into the Brutus Options Ranker. These are included in the “Strategy Template Library” that you can find by clicking the “Template Strategy” button on top of the listing page.
For the rest of this Knowledge Base article, we’ll focus on navigating and using the Templates available in the application.
Using the Strategy Template Library
These templates are divided into trading levels from beginner, defined risk, intermediate, small accounts, and starting frameworks. In addition, you can filter templates based on your market outlook (bullish, bearish, neutral), risk profile, reward, and liquidity requirements.
For example, you may choose the first one; the “short put strategy on dividend dominators – weight to customize”.
This full intermediate-level strategy looks to sell (write) puts on stocks that are noted for consistently paying dividends. It provides you with premium income from the short put. Also, an opportunity to earn dividends should they exercise against you (the holder) prior to expiration.
In this strategy, dividends and the premium that you receive serves as an offset to the difference between the strike price of the put and the market price of the stock, which will be lower, thus triggering the exercise.
As you become more familiar with the technology, you may also choose to create your own strategy for Brutus to use in its search for options trades to rank.
We hope this article was useful for you to better understand how Brutus Options Ranker Strategies work and how to add them to your account by either creating a custom strategy or by cloning a template. As always, please leave feedback below to help us improve this article.