Monthly Expiry

Monthly options are more forgiving because they have lower gamma (less sensitive to price moves) and more time to adjust if things go wrong. Mistakes don't hurt as quickly, giving you time to learn. Weekly options require more active management and can punish small errors severely.

For a single FTSE iron condor with defined risk, you might need £1,000-2,000 for the max loss plus margin. A practical minimum account size is £5,000-10,000 to have proper position sizing (keeping each trade at 3-5% risk). US SPX options can be traded with similar amounts through IBKR.

If OTM (out of the money), it expires worthless - you lose 100% if you bought it, or keep 100% credit if you sold it. If ITM (in the money), FTSE options are cash-settled automatically. For stock options (American-style), you may be assigned. It's usually better to close before expiration to avoid these complexities.

Generally no - options are not allowed in UK ISAs. You'll need to trade in a regular brokerage account (dealing account). Profits will be subject to Capital Gains Tax, but you can use your annual CGT allowance. Keep good records for tax purposes.

For credit strategies, use delta as a guide - 15-20 delta for conservative positions (higher probability of profit), 20-30 delta for more aggressive (more premium but lower probability). Also consider technical support/resistance levels. For debit strategies, consider where you expect the price to go.

Yes, for most premium selling strategies. At 50% profit, you've captured half the max gain but removed more than half the risk. The remaining 50% profit requires holding through more time and potential adverse moves. Studies show taking profits at 50% improves long-term risk-adjusted returns.

Roll if: your thesis is still intact, you want continued exposure, and you can roll for a credit or small debit. Close if: your thesis has changed, support/resistance has broken, you've hit your profit target, or rolling would require a significant debit. When in doubt, take profits and wait for the next opportunity.

Likely IV crush. If you bought an option when IV was high and it subsequently dropped (even if price moved your way), the vega loss can exceed the delta gain. This is why monthly options require attention to IV levels, not just direction. Alternatively, theta decay may be outpacing your directional gains.

A reasonable number is 3-5 positions for most accounts, ensuring no more than 20-30% of capital is at risk. Quality over quantity - each position should meet your criteria. Track aggregate Greeks to ensure you're not overexposed in any direction.

Calendar spreads when: expecting stable prices (profits from time decay differential), IV is low (calendars are vega positive), you want continuous income via rolling. Vertical spreads when: you have a directional view, want defined risk in one expiration, or expect price to move away from calendar strike.

Diversify across underlyings with low correlation, balance positive theta with some positive vega exposure for tail protection, maintain position sizes that keep drawdowns manageable, and consider adding long volatility positions as hedges during periods of low IV. Backtesting different allocations can identify optimal weightings.

Options include: VIX call spreads as portfolio hedge, maintaining some long options positions, reducing position size when IV is already low (less upside cushion), closing positions early if IV rises significantly, or adding long straddles on high-beta underlyings. The key is not being fully short vega without some protection.

Combine them: steep put skew + backwardated term structure = extreme fear (consider being a buyer of that fear). Flat skew + contangoed term structure = complacency (premium selling may be riskier). Event-driven backwardation with steep skew around events can offer mispriced calendars or risk reversals.

Track: Sharpe/Sortino ratios (risk-adjusted returns), max drawdown and recovery time, profit factor (gross profits/gross losses), win rate and average win/loss ratio, P&L attribution by Greek component (how much from theta vs delta vs vega), correlation of returns with major indices. These reveal strategy strengths and weaknesses.

Start by documenting your current rules precisely. Backtest those rules over multiple years. Identify what works and what doesn't. Simplify - the best systematic strategies have few parameters. Paper trade the systematic version. Implement with real capital at reduced size. Track live vs backtested performance. Iterate and improve.