Cheat Sheet: Strategy Selector

One-card decision aid. Pick a structure from three inputs: market outlook, IV regime, and account type. The master rule of the premium-selling approach: sell premium when IV Rank is high (> ~50), and prefer defined risk whenever the account or your stomach demands it.

Cross-refs: 03_implied_volatility · 07_short_premium · 08_defined_risk · 09_strangles · 10_iron_condors · 11_credit_spreads · 12_calendar_spreads · 16_small_accounts · 18_research_findings/strangle-vs-iron-condor

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1. The two gating rules (read first)

IV regime gate. IV Rank > ~50 → SELL premium (credit). IVR < ~30 → don't sell; buy premium or stand aside (debit / calendar). The 30–50 band is a soft "size down" zone.
Account gate. What you're allowed to trade caps the menu before outlook even matters:
Cash account: the only short option permitted is a cash-secured put.
IRA: covered calls + cash-secured puts + defined-risk spreads by default (margin relief). Naked/undefined requires "The Works" approval and a $25k start-of-day NLV.
Margin account: full menu, including naked strangles/straddles (undefined risk).

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2. Decision matrix — outlook × IV × account → structure

HIGH IV (IVR > ~50) — sell premium. This is the home turf.

LOW IV (IVR < ~30) — don't sell; buy or wait.

Note: a covered call sits in the bullish-to-neutral box for any account holding 100 shares (it's allowed everywhere, incl. IRAs); it's effectively a short put in risk profile. See 07_short_premium/covered-call.

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3. Strategy quick-reference

\Short put / CSP downside risk runs to (strike − credit) × 100, i.e. stock to zero — large but not unlimited. \\Jade lizard still carries full downside (the short put), only the upside* is neutralized when built correctly.

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4. Defined vs undefined — how to choose

Pick UNDEFINED (strangle, naked short put/straddle) when ALL hold:

Margin account with adequate buying power, and
Underlying is cheap/liquid (naked BPR stays reasonable — not SPX/NDX), and
You want the larger credit, wider breakevens, higher POP (~70%+) and accept a fat tail you'll manage with a ~2× credit stop.

Pick DEFINED (iron condor, verticals, jade lizard) when ANY holds:

IRA or cash account (naked not permitted), or
Small account / capital-tight (defined BPR = max loss, far smaller), or
Expensive underlying (naked margin prohibitive), or
You simply want a known worst case at entry.

The wings that cap the loss are the same wings that shrink the credit and lower POP — defined risk is bought, never free.

Decision tree (ASCII)

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5. Tie-breakers & gotchas

Strangle vs iron condor when both fit: strangle for more credit/POP on cheap liquid names; condor for capital efficiency on expensive indices — they're a continuum, not a binary.
Jade lizard over short strangle when slightly bullish and you want to erase upside risk: size the short put + call-spread so net credit ≥ call-spread width.
Never sell naked calls for direction — use a bear call spread; unlimited upside risk is rarely worth it.
Don't force a high-IV strategy in low IV. No IVR > ~30 ⇒ no edge in selling; the calendar is the neutral low-IV play.
Management is structure-agnostic: target ~50% of max profit, respect the ~21-DTE time stop. See 05_trade_management.

_Evidence-labeled per the Project Charter. Education only, not financial advice._