Back to Cookbook

Options Readiness Gate

A pre-flight check before you touch leverage

Forces a structured readiness check before options trading by testing literacy, sizing, defined risk, and exit planning so you do not learn expensive lessons the hard way.

CommunitySubmitted by CommunityPersonal4 min

PROMPT

Create a skill called "Options Readiness Gate". Before I place any options trade, test whether I understand the basics, my max loss, position size, exit plan, and why I am using the strategy. Return a readiness score, knowledge gaps, and a pre-trade checklist. If gaps are too large, tell me what to learn first instead of proceeding.

How It Works

This recipe is for users tempted into options before they understand the product.

Triggers

  • Interest in buying calls or puts
  • New options approval from broker
  • Repeated losses from trades placed without understanding the mechanics

Inputs

  • Experience level
  • Strategy being considered
  • Max dollar loss tolerance
  • Position size
  • Time horizon

Outputs

  • Readiness score
  • Knowledge gaps identified
  • Risk warning
  • Required pre-trade checklist

Steps / Actions

  1. Test basic concept understanding (Greeks, expiration, assignment).
  2. Verify max-loss awareness for the specific strategy.
  3. Check position size relative to portfolio.
  4. Verify exit plan exists.
  5. Block progression if knowledge gaps are too large.

Failure Modes

  • User wants options for excitement, not edge
  • No understanding of assignment, theta decay, or expiration risk
Tags:#options#risk#education#trading