Strike Targeting: Delta, Premium, and More
Every leg of a bot picks its strike using a Strike Target and a Target Type. This article explains each target type and when to reach for it.
How strike targeting works
When your bot enters, it looks at the current option chain and selects the strike that best matches each leg's target. You set the target in the leg's card in the bot form: choose a Target Type from the dropdown and enter the Target value next to it. If the chain has no strike that satisfies the target and its constraints, the bot skips that entry attempt rather than guessing.
Delta and premium in plain language
If you are new to options bots, two target styles cover most setups:
- Delta targeting picks a strike by how sensitive it is to the underlying. In tradeSteward you enter delta on a 0 to 100 scale: a 10-delta option is far out of the money and inexpensive, a 50-delta option sits at the money, and higher deltas are increasingly in the money. Many traders use delta as a rough distance-from-the-market dial: a bot that always sells the 10-delta put keeps a similar market posture day after day, even as prices move, because the chain is re-read at every entry.
- Premium targeting picks a strike by its price instead. A Premium target of 0.05 looks for the strike quoted nearest five cents, which is 5 dollars per contract. This suits traders who think in terms of credit collected or dollars paid rather than distance from the market.
The rest of the target types are variations on those two ideas: measuring from the underlying's current price, from its opening price, by fixed points, or by spread width. Whatever you pick, the selection happens fresh at every entry, so the bot adapts to each day's chain automatically.
The target types
| Target Type | What it selects |
|---|---|
| Delta | The strike with delta closest to your target, entered as a positive number between 0 and 100. |
| Premium | The strike with a mid price closest to the target. Enter five cents as 0.05. |
| Premium as Underlying % | Like Premium, but the target is a percent of the underlying's current price. |
| Min Premium | The first strike with a mid price at or above the target. |
| Percent ITM / Percent OTM | The strike closest to the set percent in or out of the money from the underlying. Use 0 for the strike nearest the underlying. |
| Points ITM / Points OTM | The strike closest to the set number of points in or out of the money from the underlying. |
| Points ITM/OTM from Open | Same as Points ITM/OTM, but measured from the underlying's opening price for the day. |
| Percent ITM/OTM from Open | Same as Percent ITM/OTM, but measured from the underlying's opening price for the day. |
| Vertical Width | A fixed spread width from the primary leg. Positive numbers place the wing further out of the money, negative numbers further in the money. |
| Vertical Width-Exact | Like Vertical Width, but only the exact strike will do. If it is unavailable, the bot skips the entry attempt. |
| Vertical Width-Underlying % | Like Vertical Width, with the width calculated as a percent of the underlying's current value. |
| Exact | The strike closest to the exact value you enter. |
Min Delta and Max Delta
With the Delta target type, two optional fields tighten the selection: Min Delta and Max Delta set the acceptable delta range, each between 0 and 100. Use one or both when you want a delta target but refuse to accept a strike outside your comfort band.
Up to Max Width
Up to Max Width pairs with the Premium target type on hedge legs, such as the long leg of a short vertical. If no strike offers your premium between the main strike and the width limit, the width limit caps how far out the bot will go.
Targeting wing legs
For spreads and condors, the usual pattern is a market-based target on the primary leg (Delta or Premium) and a Vertical Width variant on the wings so the spread keeps a consistent shape. If you have Efficient Spreads enabled in the Trading Strategy card, the bot may improve a long leg to a closer strike with the same price; this applies to Premium with Max Width, Percent and Points ITM/OTM, Vertical Width, and Exact target types, but not Vertical Width-Exact.
To see how leg targeting fits into the rest of the form, head back to Create a Bot, or continue to Entry Timing.