LEARN HOME / LESSON 4
From order to daily review
A trade begins only when the opening order fills. It ends only when the closing order fills and no short contract remains.
A broker-neutral order path
- Open the option chain for the chosen underlying.
- Choose puts and an expiry near the working timeframe.
- Check the strike, bid, ask, open interest, volume, event risk, cash reserve, fees, and concentration.
- Choose Sell to Open, one contract, and a limit credit.
- Confirm the full cash reserve separately from the premium.
- Submit, then verify whether the order filled, partly filled, or remains working.
- After a confirmed fill, calculate any buy-to-close target from the actual average opening credit.
- Review open positions during each US trading day.
Five states to keep separate
| State | What it means | What to check |
|---|---|---|
| Submitted | The broker received your instruction. | Nothing has traded yet. |
| Working | The order sits in the market. | Price, quantity, expiry, and whether it still makes sense. |
| Partly filled | Only some requested contracts traded. | The remaining short quantity and remaining order quantity. |
| Filled | The opening or closing trade completed. | Actual average fill, fees, and remaining position. |
| Closed | No short contracts remain. | Confirm the position shows zero remaining short quantity. |
The half-credit working rule
ILLUSTRATION You receive an actual opening credit of $2.00 per share. A 50% credit-capture target means buying the identical option back at about $1.00 per share. For one contract, that means $200 received and $100 paid to close, before fees.
Use the actual opening fill. Do not use the submitted limit, midpoint, last trade, or a dashboard percentage. A risk trigger or a time decision can override the target.
Daily review
- Check the short contract, quantity, and expiry.
- Check the current bid/ask, events, and price movement.
- Check the working close order and whether it filled.
- Check available cash and any assignment exposure.
- Record why you hold, close, reduce, or seek further review.
You submitted a close order at $1.00. The broker shows “working”. Have you captured the 50% target?
No. You have an instruction, not a completed trade. Check the fill. Until it fills, the short position remains open.
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