Pre-Trade Checklist: 5 Numbers to Check Before You Place an Order
The order ticket has a single button, and clicking it is a real trade: it uses 1 of your 3 daily opens, charges a $0.65 fee, and takes the premium out of your account at once. Spend 30 seconds checking 5 numbers before you click — is the data fresh, is the timing right, is the spread wide, do you have enough money, and is your exit plan written? Click only when all 5 check out; if any one fails, stop first — an order that gets blocked costs you nothing, but an order you place is already spent.
Is the data fresh, and is the timing right?
The quote is fresh only if its age is under 30 minutes: the homepage shows the data age — say 17 minutes now, with spot at 7637.91. Past about 30 minutes it is marked “stale — new positions blocked”, and clicking buy is blocked too. Wait for a fresh quote; never trade on a stale price.
No new positions after 3:30 p.m. ET: discipline is on by default, and buying after 3:30 p.m. ET gets blocked. Sort out your positions before 3:55 p.m. ET; do not leave them into the close.
Check the expiry is today: normally the chain only shows today’s expiry (0DTE). On weekends or after the close it shows the next trading day’s expiry and says so (“not 0DTE”) — do not trade it as if it expired today.
Check how far spot is from the strike: with spot at 7637.91, the 7640 strike is near the money, only about 2 points away. The farther a strike is from spot, the cheaper its premium — and the harder it is to break even. Pick your direction first, then your strike.
How wide is the spread — buys fill at the ask, sells at the bid
A buy fills at the ask: the 7640 call bids $6.00 and asks $6.10, so buying 1 contract costs $610 at the ask — not the $6.05 mid. A sell fills at the bid; the same logic runs in reverse.
Spread % = (ask − bid) ÷ mid: for the 7640 call that is (6.10 − 6.00) ÷ 6.05 = 1.7%, which is cheap. Anything over 20% is flagged in red.
The smaller the premium, the bigger the spread %: the 7700 call bids $0.10 and asks $0.15, a spread of (0.15 − 0.10) ÷ 0.125 = 40%, flagged in red — a 1-cent spread looks tiny, but it is a large share of the premium, so a market order fills further from the mid.
When the spread % is wide, pause first: switch to a strike with a tighter spread, or wait for the quote to refresh. Do not rush an order in when the spread is at its widest.
Do you have enough money — margin, fees, and breakeven
Buyers lock no margin: buying 1 contract of the 7640 call costs $610 of premium plus a $0.65 opening fee, leaving $9,389.35 of a $10,000 account. The most a buyer can lose is the premium plus fees.
Sellers lock margin: selling 1 contract of the 7640 put locks $152,800 of margin (20% of the strike, the simulator’s simplified margin — not a broker’s real margin), so a $10,000 account gets “insufficient margin” when it tries. Work out the margin before deciding to sell.
Count the fees first: $0.65 per contract per side for a single leg, $1.30 round trip. Buying 1 contract of the 7640 call can lose at most 610 + 1.30 = $611.30, and its breakeven is 7640 + 6.10 + 0.013 = 7646.11.
Count your quota too: at most 3 opens a day, and fees are capped at $60 a day before the circuit breaker trips. One contract uses 1 open; a two-leg trade like a straddle uses 2. Count how many opens you have left before you click.
Is your exit plan written — where you take profit, where you cut losses, and by when
Write down three conditions before you open: where you take profit, where you cut losses, and by when you exit. Write them first, then click — not after the position is already losing.
Set your profit target above breakeven: the 7640 call breaks even at 7646.11, so a settlement at 7646.11 is neither profit nor loss. A target above breakeven is what makes it a real profit.
Set your stop in advance too: the $611.30 maximum loss is a floor, not a plan. Decide how much loss makes you exit, write it down, and exit at that price instead of waiting for “just a little longer”.
Do not skip the time condition: no new positions after 3:30 p.m. ET, and sort out positions before 3:55 p.m. ET. The time condition in an exit plan matters as much as the price conditions.
This simulator uses real CBOE option chains delayed about 15 minutes, starts with $10,000 in virtual funds, charges $0.65 per contract per side in fees, and shows P&L net of fees; short-sale margin is a simplified simulated rule at 20% of the strike, not a real broker margin. The simulator is for practicing orders, discipline, and review. It is not investment advice and promises no returns.