Mechanical Engine

IV Rank floor: ≥ 50

DTE band: 30-65

Default structure: Iron condor

Wing width: $10 default (5/10/15/20, per account)

Profit target: 50% of max

What this engine does

The mechanical engine is the workhorse. It sells defined-risk iron condors at 30-65 DTE on liquid, non-earnings underlyings whenever IV Rank is at or above 50 (adjustable per account from the dashboard). It is the rules-first, no-opinion engine: the tastytrade mechanical approach implemented as code.

The default structure is an iron condor with short strikes at roughly 0.20 delta on each side, placing them near the edge of the expected move with roughly an 80% probability of expiring worthless. A directional credit spread is only substituted when a strong bias is present: a chain skew mark ratio greater than 2.0, or an explicit news or manual bias. A merely-elevated skew (1.5×) logs a lean but still trades the two-sided condor.

The engine prefers standard monthly expirations (3rd Friday) over weeklies for deeper liquidity and tighter bid/ask. Weeklies are accepted when no monthly falls in the DTE window, but monthly is always preferred when available.

Entry conditions

IV Rank ≥ 50 on the underlying.
DTE between 30 and 65, with monthly expiry preferred.
No earnings inside the DTE window: earnings trades are routed to the earnings engine instead.
Liquidity gate: known-liquid symbols always pass, others must meet volume and open-interest thresholds.
Bid/ask spread on each proposed leg ≤ 10% of mid at the moment of entry.
Credit-to-width ratio ≥ 0.25 (tastytrade's “1/3 of width” rule, relaxed slightly for condors).
Buying power dry-run passes: the margin impact must fit under the allocation cap with the 20% reserve intact.

Exit rules (priority order)

Profit target hit: close at 50% of max profit. This is the primary exit.
Roll ladder triggers: at 0.45 delta on the tested side, or when the underlying has moved more than 1.5× the implied move, the roll engine evaluates. For defined-risk iron condors, the bot prefers close over roll.
News gate fires: a high-confidence company-specific headline can force a close or 50% reduction regardless of P&L.
DTE backstop: close at 21 DTE regardless of P&L. Theta-to-gamma degrades past 21 DTE.
Stop loss: max loss is structural (defined-risk), but the bot will close early if loss exceeds the configured threshold to free buying power.

When to use it / when to disable it

Use it: most of the time. This is the engine designed to run unattended in normal-to-elevated vol regimes. It is the bot's bread and butter.

Disable it: rare. The risk layer already halts new entries on VIX kill switches, macro halts, and loss circuit breakers. The only reason to disable mechanical manually is if you specifically want to run only earnings or contraction trades for a defined period.

Post-exit cooldown: 2 hours after a profit-target close, 24 hours after a DTE backstop close, 72 hours after a stop-loss or news close.

Settings that control this engine