Options trading
OpenOption and CloseOption strategies, spreads, backtesting, sizing, and Aurora.
# Options trading
NexusTrade supports **algorithmic options strategies** end-to-end: you define opening and closing rules in the same **strategy / condition / action** model as equities, run **historical backtests** on options data, and (depending on your brokerage) move toward **paper or live** deployment.
👉 **[Options overview (marketing) →](/options)**
## OpenOption and CloseOption
- **OpenOption** opens a **new** options position. You configure an **options builder**: underlying ticker (or a **dynamic universe pipeline** that picks underlyings), one or more **legs** (call/put, long/short), **DTE** windows, **strike** selection (e.g. percent or dollars from at-the-money), optional **spread type** (vertical, iron condor, straddle, strangle, calendar, diagonal, custom), and **allocation** (percent of buying power, dollars, percent of portfolio, or contracts).
- **CloseOption** closes **existing** option positions. Filters include underlyings, option type, direction, spread type, **P/L percent** (take profit / stop loss), **DTE**, days held, and quantity. **Always use CloseOption to exit options**—do not use **Sell** on option legs.
For how these fit into the strategy model, see [Actions](/docs/core-concepts/actions).
## Describing strategies to Aurora
In [Aurora](/docs/features/aurora-ai), describe **concrete** option structures (underlying, spread type, DTE, strikes, allocation)—not open-ended “research then trade options” tasks. Aurora maps your request to **OpenOption** / **CloseOption** via portfolio generation.
**Example Chat / Agent prompts:**
- `"Create an SPY bull put spread when price is above the 200-day SMA: short 2% OTM put, long 5% OTM put, 30–45 DTE, 10% of buying power"`
- `"Close all SPY options at +50% profit or −30% loss"`
- `"Buy ATM calls on the top 3 S&P 500 stocks by 30-day momentum each Monday, 30–45 DTE"`
## Portfolio starting capital (important)
Standard equity portfolios often use **$25,000** as a default **initial portfolio value** when you do not specify a size. **Options consume much more buying power** than the same dollar allocation in stock: each contract represents **100 shares** of the underlying, and strategies like **LEAPS** or **short premium on index ETFs** can require **very large** notional or margin.
**When you do not state an account size**, NexusTrade’s assistants and generators assume:
- **$25,000** for **stock/ETF-only** portfolios.
- **$500,000** as a baseline **initial value** for **options** portfolios.
- **$1,000,000** for **LEAPS**, **multi-underlying** selection (e.g. momentum-ranked names), or **short premium on broad indices** (e.g. SPY, QQQ), unless you specify otherwise.
If your backtest uses too small an **initial value**, you may see few or no fills. If you **do** use a small account, narrow the strategy: fewer underlyings, **defined-risk** spreads instead of naked short premium, shorter DTE, or smaller allocation per trade.
## Backtesting options
Options backtests use historical **daily** options data where configured for your run. Treat results like any backtest: watch for overfitting, test multiple date ranges, then **paper trade** before live capital. See [Backtesting](/docs/features/backtesting) for general methodology.
## Live trading and brokerages
Not every brokerage enables every option order type in automation. Supported **multi-leg** and **options** capabilities depend on the connected broker—see [Live Trading & Deployment](/docs/features/live-trading) and your broker’s integration. **Paper trading** is the right first step for new options automations.
## Related
- [Actions](/docs/core-concepts/actions) — OpenOption & CloseOption details
- [Strategies](/docs/core-concepts/strategies) — how conditions and actions combine
- [Aurora AI Agent](/docs/features/aurora-ai) — natural-language portfolio creation