How each side is implemented: the rules the engine trades, how capital is split, and what it did on each run. Nothing here is manual — the cron-driven engine places every order.
3–4 weeks (30–45 DTE contracts) · Options — ATM straddle (1 call + 1 put, same strike)
When implied volatility (IV) falls below a stock's 30-day historical realized volatility (HV), options are statistically underpriced. Goyal & Saretto (2009) showed that a long-straddle portfolio built on this signal earned ~3.9% per month after costs — and the edge comes from vega, not gamma: IV mean-reverts back above HV, lifting the value of your options.
IVR < 20% AND current IV is at or below the stock's 30-day HV (check Market Chameleon → IV Rank)
28–45 DTE; exit at +25% gain, −30% stop, or 21 DTE · Options — buy ATM call (oversold bounce) or ATM put (overbought fade)
Stocks rarely move in one direction forever. RSI (Relative Strength Index) measures momentum on a 0–100 scale: below 30 means oversold (sold too hard, likely to bounce), above 70 means overbought (bought too hard, likely to fade). Buying a call when RSI < 30 or a put when RSI > 70 bets on mean reversion — the stock snapping back toward its average. Near-term ATM options give leveraged exposure to that move.
RSI(14) < 30 → buy call | RSI(14) > 70 → buy put
2–6 weeks (monthly rotation review) · Sector ETFs — SPDR XL-series and a few thematic ETFs
Money flows between sectors based on where the economy is in the business cycle and recent price momentum. Rotating into the leading sector ETF each month captures these trends at low cost and with built-in diversification.
At the start of each month, rank sector ETFs by 1-month total return. Rotate into top 1–2 only if the new leader outperforms your current hold by >3% and is above its 50-day MA
5–7 days — open 1 week before earnings, close the morning after · Options — long ATM straddle on weekly expiry right after earnings
IV spikes to extreme levels in the week before earnings — the market is paying up for uncertainty. The academic edge is on the SELL side (Jongadsayakul: covered calls earn most when IV is elevated; sellers collect the IV crush). This strategy takes the opposite long side: if the actual earnings move is LARGER than what IV implies, the straddle buyer wins. This is a bet that the market is underestimating how big the move will be. Note: on average the sellers win — but individual earnings can wildly exceed expectations.
Earnings date confirmed within 5–7 days AND pre-earnings IV ≥ 40%
1–3 weeks until VRP normalises · Options — long calls (bullish) or long puts (bearish), ATM or one strike OTM
Most of the time, implied vol exceeds realized vol — options are expensive. But roughly 15% of trading days see a VRP inversion: HV rises above IV, meaning options are actually cheap. Dew-Becker & Giglio document these inversions as a clear warning to stop selling premium. Goyal & Saretto's framework flips: when IV < HV, you want to be long vol. This strategy turns the inversion into a directional entry — buy calls or puts when options are genuinely cheap.
IV has been below 30-day HV for 3+ consecutive sessions (VRP inversion confirmed) AND you have a clear directional catalyst or technical setup
Weeks to months — hold until thesis breaks · Individual stocks — large-cap, highly profitable companies
Wide-moat companies with durable competitive advantages, consistent earnings growth, and high returns on capital compound wealth over time. The strategy is to build a concentrated portfolio in a few high-quality names and add to them on weakness rather than trading around them.
Stock pulls back 10–15% from its 52-week high with no fundamental deterioration in the business
1–3 months between regime shifts · Sector ETFs (stocks for core; protective puts as hedges only when IVR < 20)
Different sectors outperform at different stages of the business cycle. Matching your portfolio's sector exposure to the current phase improves risk-adjusted returns by owning what the macro environment structurally favours, not chasing last month's winner.
Identify cycle phase using: ISM Manufacturing PMI trend, yield curve slope (10Y-2Y), unemployment direction, and Fed policy stance — need 3 of 4 indicators to agree
1–3 weeks per trade · Individual stocks (protective puts as hedges only when IVR < 20)
Stocks in established uptrends oscillate between support and resistance. Buying at a well-defined support level and selling at the next resistance 1–3 weeks later captures the swing without requiring perfect timing of tops and bottoms.
Stock in uptrend (higher highs + higher lows over 2+ months) pulls back to defined support with RSI between 40–55