Tips and Tricks

1. Search for the most liquid contracts, i.e. those with a very small bid-ask spread. This ensures that you can get in AND out of the trade quickly at the price you choose.

2. Make sure that the duration of the contract makes sense in light of the time frame of your trade. You wouldn't want to buy a 0DTE for a pattern that took weeks to set up.

3. "Buy low, sell high" also applies to IV in the options world. If you buy contracts with a high IV rank or percentile (such as right before earnings or a major economic catalyst) you stand a high chance of suffering from IV crush if you hold through the catalyst. Think about it--option sellers demand a higher premium because of the UNCERTAINTY of what may occur, but after all is said and done everyone knows what the market reaction was. Alternatively, if you buy weeks before the catalyst you may actually benefit from rising IV.

Bonus. Make SURE you have selected the right contract direction. It will be an utterly rude awakening if you check your account the next day and you've lost all your premium paid because you accidentally bought puts instead of calls. It happens.