Trade expectations, not price.

Markets reward different strategies in different regimes. Before looking at any single name, I assess the macro backdrop: economic momentum, inflation and rate direction, liquidity conditions, and how those forces feed into equity valuations.

If the backdrop is hostile, I reduce exposure or structure trades defensively. If it is supportive, I allow for more aggressive positioning. Stock picking without a macro lens happens in a vacuum.

Every idea starts with a company that has real revenues, real earnings or a clear path to them, and institutional coverage. No penny stocks. No crypto narratives. No setups that exist only on a chart. If a company cannot be valued, it cannot be traded rationally.

The goal at this step is to find reasons to say no quickly. Most names fail on fundamentals, which is fine. The fewer names I spend time on, the more attention each survivor gets.

Before touching options, I set a target price using historical and forward P/E and P/S multiples applied to next year's earnings and sales. That produces a target grounded in how the market has actually valued the business, rather than a number pulled from thin air.

If the gap between price and value does not support a minimum 3:1 ROI on the options structure, the idea stops here. No mispricing, no trade. This threshold kills most ideas, which is exactly what protects the ones that survive it.

Prices do not move because charts look good. They move because expectations change. Every trade needs a specific, identifiable event capable of shifting those expectations inside the trade window.

Catalysts move options prices, not just stock prices, and a clear one is what makes the asymmetric payoff possible in the first place. Without a catalyst there is no structural reason to expect movement, and no reason to be in the trade.

I do not predict. I structure scenarios. For every trade I define what must happen for the thesis to work, what invalidates it, and the time horizon for the catalyst to play out.

Most trades last weeks to a few months. Time matters intensely with options, because a right thesis with a wrong expiry is still a losing trade. The time window constrains the position as tightly as the price target does.

Options are the implementation, not the strategy. The structure gets chosen to match the thesis, the time horizon, and the risk profile. Every trade carries a defined maximum loss, known and accepted before entry.

Selection depends on implied volatility level, time to catalyst, and liquidity. High IV favors spreads. Low IV favors outright longs. Liquidity and tight bid/ask spreads are non-negotiable in either case.

Being wrong is part of the job. The book runs 12 to 14 non-correlated positions across different sectors, industries, and catalysts, sized similarly to each other. No single position gets the chance to materially damage the portfolio.

Consistency comes from process rather than conviction. Even the best trade of the year cannot be allowed to wipe out the book if the thesis turns out wrong.

Once in a trade, I monitor three things: whether the fundamentals have changed, whether the catalyst is still valid, and how option pricing is evolving. Trades get adjusted or closed when the thesis breaks, the target is reached, or the risk and reward deteriorate.

Every exit is a rules-driven decision rather than a feelings-driven one. That is what keeps a losing trade from turning into a catastrophic one.