As options trading becomes more popular in the financial market, more and more options experts are sharing their trading strategies through social media. Among them, options trading expert "Cook Brother" (@thecookcapital1) has attracted many fans with his structured trading suggestions and clear risk management ideas.

This article analyzes the content of his X platform tweets, summarizes the characteristics of his options trading strategy, and provides practical suggestions for coin friends who want to refer to his style for investment.

1. Characteristics of the Cook's Option Trading Strategy

1. Prefer multi-leg combination strategies with calendar spreads as the core

Cook's trading advice shows that his most commonly used strategy is the Calendar Spread or its variants (such as the Diagonal Spread). He usually constructs the trade in the following way:

• Sell short-term out-of-the-money options: For example, sell an out-of-the-money 1 option expiring on April 11 to quickly capture the decay of time value.
• Buy longer-dated options as protection: For example, buy options expiring on April 25 or May 30 to limit potential risk.
• 1:1 ratio design: Maintain a balance in the number of buy and sell options to form a structure with positive theta (time value gain) and negative gamma (reduced sensitivity to price fluctuations).

This multi-leg strategy exploits the difference in time value between different expiration dates, pursuing returns while reducing risks through hedging, reflecting his deep understanding of market structure.

2. Time value driven profit model

The profit model of Chuzige is centered on theta decay:

• Profits for short-term option sellers: By selling short-term options, he earns profits from the rapid decay of theta, which is particularly effective in the weeks before expiration.
• Exploiting volatility differences: When buying forward options, choose contracts with lower implied volatility, while when selling short-term options, you may take advantage of higher volatility to magnify your profit potential.
• Stable cash flow: Although the returns are not as high as naked selling options, through protective buying, he ensures the stability of the strategy, which is suitable for sideways or low volatility markets.

3. Strong risk management awareness

The trading style of Chef Brother is not aggressive speculation, but focuses on risk control:

• Protective hedging: Buying forward options limits downside risk and avoids significant losses due to volatile market conditions.
• Balancing yield and safety: The negative gamma structure suggests that he is willing to sacrifice some upside potential in exchange for more predictable returns.
• Technical execution: He recommended using Smart Trading to split orders and optimize transactions, showing his emphasis on transaction efficiency and cost control.

4. Technology orientation and flexibility

The trading strategy of the chef brother shows strong technicality:

• Tool dependence: It is recommended to use intelligent trading tools, and data analysis implies that he focuses on quantitative analysis.
• Combination of time periods: The strategy integrates short-term and medium-term options to flexibly adapt to market changes.

Overall, he is a highly technical, sell-side, time-value-focused, and risk-management options trader. His style is suitable for investors who seek stable returns rather than high-risk speculation.

2. How to learn his trading wisdom and invest

1. Understand the basics and application of calendar spreads

Key points to learn: Understand how calendar spreads are constructed, i.e. selling near-month options and buying far-month options. Pay attention to the impact of strike price selection, expiration date intervals, and implied volatility.
Practical advice: Start with a small amount of capital, try to build calendar spreads on low-volatility assets, and observe the balance between theta returns and gamma risks.
Tool support: Use option analysis tool software (such as Greeks.live) to calculate Greek values and ensure the validity of the positive theta structure.

2. Cultivate the core concept of time value trading thinking: regard volatility and time value as the main sources of profit, and avoid over-reliance on price direction predictions.
How to do it: Choose to sell out-of-the-money options with a relatively close expiration date (1-4 weeks), and buy options 1-2 months later to hedge. The goal is to retain the premium when the short-term options expire.
Note: Monitor the volatility of the underlying asset to avoid overexposure before high volatility events (such as financial reports).

3. Strengthen risk management and protection strategies: Imitate his position ratio design to ensure that each option sold has corresponding protection. Calculate the maximum loss and set a stop loss point.
Fund management: Control the risk of a single transaction within 5% of the account funds to avoid major losses due to a single mistake.
Scenario analysis: Simulate sharp price increases or decreases before trading to evaluate the hedging effect of long-term options.

4. Improve the use of technical execution tools: Learn to use smart order functions (such as split orders or conditional orders) to optimize entry and exit prices.
Data-driven: Focus on the Implied Volatility (IV) curve and Historical Volatility (HV) to look for opportunities where IV is overvalued in the short term.
Continuous optimization: record the profit and loss ratio and execution details of each transaction, and gradually improve the strategy.

5. Adapt to the market environment and low volatility market: Calendar spreads perform best when the market is sideways or fluctuates slightly, and stable targets can be given priority.
High volatility market: If the market fluctuates violently, the expiration date interval can be shortened or the strike price can be adjusted to reduce gamma risk.
Flexible Adjustment: Dynamically adjust position size and protection based on economic data or events (such as the Federal Reserve’s interest rate decision).

In short, the option trading style of Chuzige is centered on calendar spreads, making profits through time value and supplemented by strict risk management, showing a combination of technicality and robustness. For novice investors, learning his strategy requires starting with the basics and gradually mastering the construction and optimization of multi-leg combinations; for experienced traders, his style can be used as a reference for low-risk cash flow strategies. It is recommended to continue to pay attention to Chuzige's latest tweets and verify the effectiveness of his strategy in combination with real-time market dynamics. Through the combination of theoretical learning and practice, coin friends are expected to draw inspiration from it and build an option trading system that suits them.