What is a Strategy?
A strategy is a set of rules that tells Claxton what to trade and how. Think of it as a recipe: you define the ingredients (which stock, what type of trade) and the instructions (when to enter, when to exit, how much to risk).
You can have multiple strategies running at the same time — for example, one trading 0DTE iron condors on SPX and another trading weekly credit put spreads on SPY.
Strategy Types
Claxton supports several options strategy types. Here’s what each one means in plain English:
Iron Condor
You sell two credit spreads at the same time — one above the current price (call side) and one below (put side). You profit if the underlying stays between your two short strikes.
Think of it as: “I bet the market stays in a range.”
- ✅ Defined risk (you know your max loss upfront)
- ✅ Collects premium from both sides
- ⚠️ Loses money on big moves in either direction
Credit Put Spread (Bull Put)
You sell a put at a higher strike and buy a put at a lower strike. You collect premium and profit if the underlying stays above your short strike.
Think of it as: “I bet the market doesn’t drop too far.”
- ✅ Defined risk
- ✅ Bullish bias
Credit Call Spread (Bear Call)
The opposite of a credit put spread — you sell a call at a lower strike and buy a call at a higher strike. You profit if the underlying stays below your short strike.
Think of it as: “I bet the market doesn’t rise too far.”
- ✅ Defined risk
- ✅ Bearish bias
Iron Fly (Iron Butterfly)
Like an iron condor, but your short strikes are at the money (right at the current price). This collects much more premium but requires the underlying to stay very close to where it is.
Think of it as: “I bet the market barely moves.”
- ✅ Defined risk
- ✅ Higher premium collected
- ⚠️ Narrower profit zone
Butterfly (Debit Call Butterfly)
You buy one call, sell two calls at a middle strike, and buy one call at a higher strike. You pay a debit to enter and profit if the underlying lands near the middle strike.
Think of it as: “I’m targeting a specific price.”
- ✅ Defined risk
- ✅ Low cost to enter
- ⚠️ Needs precision — max profit at the middle strike
Wheel
A two-phase strategy: first, you sell cash-secured puts to collect premium. If you get assigned (the stock drops below your strike), you then sell covered calls against the shares until they’re called away. Then you start again.
Think of it as: “I want to buy this stock at a discount and get paid while I wait.”
- ✅ Great for stocks you’d be happy to own
- ⚠️ Requires enough capital to buy 100 shares
Which Strategy Should I Start With?
If you’re new to Claxton, here’s a simple recommendation:
💡 Start with a single 0DTE Iron Condor strategy on SPX with conservative settings. Use paper trading mode first to see how it behaves before risking real money.
The bot comes with preset strategies that are already configured with sensible defaults. You can load one and adjust from there.
Key Concepts
Before diving into creating strategies, here are a few terms you’ll see:
- Underlying — The stock or index being traded (SPX, SPY, QQQ, etc.)
- DTE — Days to Expiration. How many days until the options expire. “0DTE” means they expire today.
- Delta — A measure of how far out-of-the-money your options are. Lower delta = further from current price = safer but less premium.
- Premium — The money you collect when you sell options. This is your potential profit.
- Defined Risk — Strategies where your maximum possible loss is known before you enter the trade.
Ready to create your first strategy? → Creating a Strategy