Concepts

DTE is the number of calendar days remaining until an option contract expires. A 30 DTE option expires in 30 calendar days. Options lose time value (theta) as DTE decreases, accelerating in the final 21 days. ACondor's mechanical engine targets 30-65 DTE at entry, long enough that theta is meaningful but short enough that the position resolves in roughly one to nine weeks. The bot's management rules are also DTE-anchored: the mechanical engine closes at 21 DTE regardless of profit, because the theta-to-gamma tradeoff degrades past that point.

IV Rank measures where current implied volatility sits relative to its own trailing 52-week range. Formula: (IV_now minus IV_52wk_low) divided by (IV_52wk_high minus IV_52wk_low) times 100. An IV Rank of 0 means vol is at the bottom of its annual range. An IV Rank of 100 means it is at the top. ACondor only sells premium when IV Rank meets its engine-specific floor: 50 for the mechanical and earnings engines, 80 for contraction. Each floor is adjustable per account from the dashboard. Selling at low IV Rank means collecting thin premium for the same risk. The edge disappears.

An iron condor is a four-leg options structure. You sell an out-of-the-money put (the short put), buy a put further below it (the long put wing), sell an out-of-the-money call (the short call), and buy a call further above it (the long call wing). The credit collected when you enter is your maximum profit. The difference between the short and long strikes (the wing width) minus the credit collected is your maximum loss. Maximum loss is defined and capped at entry: you cannot lose more than the wing width per contract regardless of how far the underlying moves. ACondor's mechanical engine defaults to 10-dollar-wide wings and 20-delta short strikes, with the width selectable per account in $5 increments (5, 10, 15, or 20). At those parameters, a 10-wide iron condor collecting $3.00 credit has max profit $300 and max loss $700 per contract.

Delta is one of the options Greeks. Two practical interpretations: as a hedge ratio, a 0.30-delta option moves approximately $0.30 for every $1 move in the underlying. As a probability approximation, a 0.30-delta option has approximately a 30% chance of finishing in-the-money at expiration (70% chance of expiring worthless). ACondor uses delta as a probability filter at entry. For the contraction engine, 16-delta shorts place the strikes at approximately one standard deviation OTM, with roughly 84% probability of expiring worthless.

POP is the modeled probability that a position closes at any profit at expiration. ACondor calculates POP conservatively as 1 minus the sum of the absolute values of the short deltas. For a 30-delta iron condor: POP = 1 - 0.30 - 0.30 = 0.40. This is stricter than tastytrade's wider POP that includes the credit cushion to breakeven. The POP floor in each engine is shipped disabled by default precisely because this conservative metric would reject most default condors if set too high.

Theta is the rate at which an option loses value as time passes, all else equal. Premium sellers collect positive net theta. Theta accelerates in the final weeks before expiration, which is why ACondor closes mechanical trades at 21 DTE. At that point, gamma risk (the rate at which delta changes) begins to outpace the remaining theta benefit, and holding into expiration becomes a lottery rather than an edge.

Vega measures an option's sensitivity to a 1-point change in implied volatility. Short premium positions are short vega: they profit when IV falls. The earnings and contraction engines are specifically designed to harvest vega contraction: enter when IV is elevated, exit when IV has mean-reverted. The mechanical engine benefits from vega less directly, relying more on theta decay over its 30-65 DTE window.

Implied volatility is the volatility the market is pricing into options. Realized volatility is what actually happens. The structural edge in premium selling is that IV tends to overstate realized vol, especially when IV Rank is elevated. ACondor's mechanical engine requires IV Rank at or above 50 to ensure the bot only sells when premium is elevated relative to that name's own history.

A credit spread is a two-leg vertical: sell a closer-to-the-money option, buy a further OTM option of the same type. You collect a credit on entry. The long wing caps your maximum loss. Iron condors are two credit spreads on opposite sides of price. ACondor's mechanical engine enters iron condors by default; when a directional bias exists, it may enter a single-sided credit spread instead.

A debit spread is a two-leg vertical: buy a closer-to-the-money option, sell a further OTM option of the same type. You pay a debit on entry and bet on direction. Defined risk by construction. The directional engine uses debit spreads, often funded by an offsetting credit spread (a pair structure). The profit target is 82% of max profit.

A short strangle is a two-leg undefined-risk structure: sell an OTM put and sell an OTM call. It collects more premium than an iron condor but has undefined loss. ACondor restricts strangles to margin accounts and uses defined-risk variants in IRAs and cash accounts. SPY, QQQ, IWM, and XLF are restricted to defined-risk-only regardless of account type, because a naked index ETF position represents very large correlated notional exposure.

IV Crush is the rapid drop in implied volatility after a known event resolves, most commonly an earnings report. The market prices in event uncertainty beforehand; once the event passes, uncertainty disappears and IV collapses. The earnings engine harvests this collapse: enter when IV inflates above IV Rank 50 with short strikes anchored beyond the implied move, hold through the report, then bank the crush — a position at its profit target the morning after closes immediately, and anything else is managed by the standard defense rules.

Rolling means closing one position and opening another, usually further out in time or further OTM, often as a single combined order. ACondor's roll ladder rolls tested short strikes out in time for a net credit when the trigger delta (0.45) is reached. Rolling buys time and reduces cost basis but does not cap loss: the wing on the defined-risk structure already does that. ACondor follows tastytrade's guidance: roll_defined_risk is OFF by default. Rolls require a minimum net credit of $0.25 per contract (roll_fee_buffer); otherwise the position closes.

A defined-risk structure has a known maximum loss capped by a long option wing. Iron condors, credit spreads, and debit spreads are all defined-risk. An undefined-risk structure (naked options, short strangles) has theoretically unlimited loss on the call side. ACondor enforces defined-risk-only in IRA and cash accounts automatically. In margin accounts, undefined-risk is off by default for all engines and must be explicitly enabled per-symbol.