One page, four tools. The selector routes you to the strategy pages worth reading for your outlook and your tier, and the three calculators — expected move, premium yield, position sizing — do their arithmetic with the real contract multipliers, because 100 shares per contract is a US convention, not a law of nature.
This page merges the old strategy selector and options tools pages into one planner, arranged in the order a trade decision actually deserves. First check what move the market is already pricing in — the expected move calculator. Then check what a premium genuinely pays on the capital it ties up — the premium yield calculator. Then convert your risk budget into a whole number of contracts — the position sizing planner, whose honest answer is frequently zero. Only after those three numbers exist is "which structure?" a sensible question, and that is what the selector is for.
Use the selector when you have a view but no structure: it filters the curriculum's strategy pages by outlook, objective, volatility regime, experience tier, assignment tolerance, horizon and capital style, then returns the three best-fitting pages to read next. Use the calculators when you already know the structure and need the arithmetic. Neither half issues trade recommendations — the output of this page is always a reading list and a set of numbers, never an instruction.
Seven inputs; three results; one hard gate. The experience tier input filters rather than re-ranks: Level 1 keeps you inside the five fully-covered structures whatever the other inputs say, and nothing asymmetric or undefined-risk appears unless you set the tier to Level 3 yourself.
The old selector asked for a "risk style" — starter, defined, advanced — which mapped to nothing else on the site. The rebuilt selector is keyed to the curriculum's three tiers and behaves like the gates on the tier pages themselves. Choose Level 1 · Foundation and the pool is the five fully-collateralised structures — long call, long put, cash-secured put, covered call, collar — where the worst case is a number you can write down before you click. Choose Level 2 · Structure and the defined-risk multi-leg strategies join them: the four verticals, condors and butterflies, calendars and diagonals, the poor man's covered call, the Wheel and LEAPS, where maximum loss is fixed by construction rather than by collateral.
Level 3 · Exposure must be selected explicitly, and every Level 3 result carries the tier's warning, because those structures assume things a dropdown cannot verify: uncovered-option permission, portfolio margin — which Interactive Brokers UK gates at USD 110,000 of net liquidation value — a written twelve-month record of defined-risk trading, and pre-committed caps on net vega and buying-power usage. If any of that is missing, the honest route is the Level 2 alternative each strategy page names.
One structure is never returned at all: the uncovered short call. It sits last in the curriculum, taught so that you understand it well enough never to place it, and a routing tool that could surface an unlimited-loss trade to a reader who has answered seven dropdowns would be working against the page it links to.
The gate is honesty-based, like a broker's appropriateness assessment: nothing stops you selecting Level 3, but the selector trusts your answer, so make it true.
All three calculators take a contract standard, and the maths respects it: results convert to cash at 100 shares per US contract (dollars), 1,000 shares per traditional ICE UK single-stock contract (pence in, pounds out), and £10 per index point on the FTSE 100. Dollar results are labelled as dollars — converting them to sterling needs the exchange rate on the day, which is your broker's number, not ours.
One standard deviation ≈ S × IV × √(DTE ÷ 365), where S is the price or index level, IV the implied volatility and DTE the days to expiry. If the implied volatility is right, the underlying finishes inside the band roughly two times in three — it is a market-implied range, not a forecast. The daily figure uses √(1 ÷ 252), one trading day.
Divides a premium by the capital it actually locks up. A covered call ties up the share line at today's price; a cash-secured put ties up the full strike × multiplier as collateral. On the FTSE 100 contract the collateral shown is the full £10-per-point notional a fully cash-secured writer would hold — most index writers run margin instead, which is a Level 3 conversation.
Turns account size and a per-trade risk percentage into a whole number of contracts, and rounds down — a fractional contract does not exist. It agrees with the position-sizing framework: a cash-secured put at strike K commits K × multiplier of collateral (a 500p strike on an ICE UK contract is £5,000), and when the budget cannot fund one contract the answer really is zero.
Implied volatility 26%, 30 days to expiry: 530 × 0.26 × √(30 ÷ 365) ≈ 39.5p, a one-standard-deviation band of roughly 490.5p to 569.5p — about ±7.5%. On the traditional 1,000-share ICE contract that is about £395 of one-standard-deviation exposure per contract. The same formula at index scale: FTSE 100 at 9,000, IV 14%, 21 days gives 9,000 × 0.14 × √(21 ÷ 365) ≈ 302 points, which is about £3,022 per contract at £10 per point.
Hold 1,000 shares at 530p (£5,300 of stock) and sell the 560p call 30 days out for 12p. Premium cash is 12p × 1,000 shares = £120; yield on capital is £120 ÷ £5,300 ≈ 2.26%, which annualises to roughly 27.5% — a number that assumes you repeat the identical trade at the identical premium twelve times in a row, which the market rarely permits. Breakeven falls to 518p, and if the shares are called away at 560p the whole position banks (560 − 530 + 12)p × 1,000 = £420 before dealing costs — with the premium taxed at the date the option was granted, not at expiry.
A 1% risk budget is £200 per trade. A FTSE 100 credit spread 50 points wide collecting 12 points risks (50 − 12) × £10 = £380 per contract — more than the budget, so the planner says zero contracts, and that is the answer. A cash-secured put at a 500p strike on an ICE UK single stock needs £5,000 of collateral and risks £4,860 if the shares go to nothing after a 14p premium: on this account that is a quarter of the portfolio on one name, five times the 5% cap the 1-2-5 rule sets for income trades. The defined-risk substitute is a put spread, where the width rather than the strike sets the risk.
| Contract | Multiplier | Quoted in | Settlement |
|---|---|---|---|
| US-listed equity or ETF option | 100 shares | Dollars | Physical delivery, American exercise |
| ICE Futures Europe UK single stock, traditional series | 1,000 shares | Pence | Physical delivery of UK shares — SDRT at 0.5% on the strike consideration |
| FTSE 100 index option | £10 per index point | Index points | Cash-settled, European exercise — no early assignment |
Contract specifications: ICE single stock options and ICE FTSE 100 index options. And the wrapper is a general investment account: options are not qualifying ISA investments — HMRC's guidance for ISA managers lists "futures or share options" among the things a stocks and shares ISA may not hold (gov.uk) — and almost no SIPP permits them. Every figure this page produces is therefore pre-tax, in a taxable account; the tax points themselves are on the tax worked examples page.
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