How to choose a strategy
A decision matrix that maps your view (direction × volatility × catalyst) to the right Tradient strategy.
Picking the right strategy is more of the trade than picking the right ticker. Most retail losses come from putting the right view through the wrong structure — buying calls when you should have sold puts, or selling condors when you should have bought a straddle. This page is the decision matrix.
The three questions
Before you scan, answer three questions about the underlying in front of you:
- Direction.Up, down, or sideways? Or “I have no view, I just want to be paid for time decay”?
- Volatility. Is implied vol high, normal, or low relative to its own history? Use IV rank as your shortcut.
- Catalyst.Is there a known event in the next 30 days that could move the stock? (Earnings, FDA, fed, court, M&A.)
Three questions, ~16 useful answer combinations. Most of them map to a specific strategy.
The matrix
Bullish + low IV + no catalyst
You want to be long, vol is cheap, no event to time around. Use: Bull call spread. Cheap entry on low vol, defined risk, defined upside cap. Alternatively buy stock and sell covered calls against it once you’re in.
Bullish + high IV + no catalyst
You want to be long, but vol is expensive — you don’t want to pay retail. Use: Bull put spread or cash-secured put. Sell premium instead of buying it. The high IV pays you to be patient.
Bullish + any IV + upcoming catalyst
Direction with timing. Use: bull call spread with the short strike at your post-catalyst target. Or, if the catalyst is more about magnitude than direction, a long straddle.
Bearish + low IV + no catalyst
You want short exposure on cheap vol. Use: Bear put spread. Same logic as bullish low-IV, mirrored.
Bearish + high IV + no catalyst
You think it falls but vol is rich. Use: Bear call spread. Get paid to be right.
Neutral + low IV + no catalyst
Range-bound with cheap vol. This is the worst combo for short premium — there’s nothing to collect. Use: nothing, or wait for IV to expand. Don’t force a trade just because you opened the scanner.
Neutral + high IV + no catalyst
The income trader’s sweet spot. Use: Iron condor (defined risk) or short strangle (undefined risk, more credit). Both express the same thesis; condor is the safer default.
Neutral + any IV + upcoming catalyst, betting on calm
You think the market is overpricing the move. Use: iron condor sized small, or simply skip the trade. Catalysts are where short-vol traders get hurt — Tradient’s earnings IC scan exists for this thesis but treat it as small-size lottery.
Neutral + low IV + upcoming catalyst, betting on a move
You think the market is underpricing the move. Use: long straddle. Cheap vol + known catalyst is the canonical long-vol setup.
Long stock you want to keep + any IV
Use:covered calls (income overlay) or a bear put spread / collar (defined-risk hedge). Don’t sell the stock; structure around the position.
Long stock you’d sell at a higher price
Use:covered call at the price you’d be happy to exit. The premium is bonus income on top of the sale.
What if I have no view?
Skip the trade. The whole product is built around the assumption that you actually have an opinion to monetize. If you don’t, the highest-EV move is to wait. Tradient will not penalize you for taking a day off — the scans are still there tomorrow.
How Tradient’s Goal Gallery maps to this matrix
- Generate income → cash-secured put (neutral/bullish + high IV)
- Bet on a big move → long straddle (any direction + low IV + catalyst)
- Bet on calm → iron condor (neutral + high IV)
- Hedge what I own → bear put spread (long stock + want defined downside)
- Trade earnings → iron condor (catalyst + high IV)
- I have a thesis → bull call spread or bear put spread (directional + defined risk)
Where to go next
- IV rank and regime — how Tradient labels the IV environment for you.
- Tradient Score — how we rank the candidates within a strategy.