/ 10 CHAPTERS · ANNOTATED SVG DIAGRAMS · 85-TERM A–Z GLOSSARY

Coteau Pro Field Manual: Systematic Trading, Options Curve & Portfolio Risk

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Ch 01 · The 6 Types of Trading & Whe Ch 02 · Entry Triggers: ORB, VWAP Re Ch 03 · The 1R Risk Law & Exact Shar Ch 04 · Systematic Exit Hierarchy: H Ch 05 · Options Payoff Diagrams, Del Ch 06 · Rolling Options Audit: When Ch 07 · Multi-Asset Allocation: Equi Ch 08 · Trading 13F Institutional, 1 Ch 09 · Reading the 4 Market Regimes Ch 10 · Win/Loss Journaling, Profit 📖 A–Z Glossary (85)

/ CHAPTER 01 · TIMEFRAMES & CAPITAL ALLOCATION

The 6 Types of Trading & When Each Works

Scalp (1–15m), Intraday Momentum (15–120m), Multi-Day Swing (2–15d), Position / Trend (2–12w), Options Income & Convexity (7–60 DTE), and Systematic Multi-Asset Sleeve Rebalancing.

Scalp / Tape (1m–15m): Trade only liquid leaders (>3x RVOL, spread <0.05%). Hard stop below opening range or VWAP.
Intraday Momentum / ORB (15m–2h): Enter on 5m/15m Opening Range Breakout above VWAP with volume confirmation.
Multi-Day Swing / PEAD (2d–15d): Post-Earnings Announcement Drift & tight flags surfing the rising 10/21 EMA.
Position & Secular Trend (2w–12w): Weekly RS > 85 above rising 50 SMA & 200 SMA; scale out only on weekly 21 EMA close break.
Options Income & Convexity (7–60 DTE): Sell premium when IV Rank > 50%; buy debit spreads when IV Rank < 30%.
Core Systematic Portfolio (Monthly/Quarterly): Combine Equity Alpha + Treasury Duration (TLT/IEF/SGOV) + Energy/Commodities + Crypto.

/ CHAPTER 02 · HIGH-EXPECTANCY SETUPS

Entry Triggers: ORB, VWAP Reclaim, 21 EMA Pullback & Base Breakout

Never chase extended candles >2.5x ATR above the 21 EMA. Demand tight risk invalidation at a clear structural pivot.

Opening Range Breakout (ORB): Mark high/low of first 15 minutes. Enter long on break of ORB high when price > VWAP and RVOL > 1.8x.
VWAP Reclaim & Higher-Low Pivot: Wait for morning flush to undercut VWAP, reclaim VWAP on rising volume, and hold first higher low.
21 EMA Tight Pullback (Pocket Pivot): In an established Stage-2 uptrend (price > 21 EMA > 50 SMA), buy the first low-volume inside day at 21 EMA.
Multi-Week VCP / Flat-Base Breakout: Volatility contracts from -18% to -6% to -2.5% before breaking pivot on >200% volume.

/ CHAPTER 03 · RISK & POSITION SIZING

The 1R Risk Law & Exact Share Sizing Formula

Professionals size every position by Dollar Risk (1R), never by arbitrary share count. Shares = (Account × Risk%) ÷ |Entry − Stop|.

Define 1R before every order: Standard 1R = 0.50% to 1.00% of total equity per trade ($500–$1,000 on a $100,000 desk).
Formula: Shares = Floor( (Account Equity × Risk%) / (Entry Price − Invalidation Stop Price) ).
Portfolio Heat Cap: Maximum open unhedged risk across all active swing positions must never exceed 5.0R.
Drawdown Throttle: If desk equity drops -5% in a month, cut 1R size in half (0.25%–0.50%) until two consecutive green weeks.

/ CHAPTER 04 · TAKING PROFITS & CUTTING LOSSES

Systematic Exit Hierarchy: Hard Stops, +2R Scales & 21 EMA Trails

Amateur traders take tiny profits early and let losers run. Systematic traders lock in partial gains at +2R and trail the core.

Rule 1 — Unconditional Hard Stop at -1.0R: Never widen a stop after entry. If price touches invalidation, exit 100% immediately.
Rule 2 — De-Risk at +1.5R to +2.0R: Sell 1/3 of the position and move stop on the remaining 2/3 to breakeven entry price.
Rule 3 — Trail Core on 10 EMA / 21 EMA: Hold the remaining 2/3 until the first daily close below the 21 EMA (or weekly 10 WMA).
Rule 4 — Climax Top Override: If stock gaps up >3x ATR on exhaustion volume >4x average, trim an additional 1/3 into strength.

/ CHAPTER 05 · OPTIONS P&L CURVES & GREEKS

Options Payoff Diagrams, Delta/Theta/Vega & Structure Selection

Match option structure to IV Rank and directional conviction: Debit Verticals, Credit Put Spreads, Iron Condors, Calendars & PMCC.

Bull Call / Bear Put Vertical (IV Rank < 35%): Buy 0.60Δ ITM/ATM leg, sell 0.30Δ OTM leg at target to cap Theta decay and Vega crush.
Bull Put / Bear Call Credit Spread (IV Rank > 50%): Sell 0.25Δ–0.30Δ strike beyond support/resistance, buy protection 5–10 pts out; take profit at 50% max credit.
Iron Condor (Range-Bound + High IVR): Combine 0.20Δ Put Credit Spread + 0.20Δ Call Credit Spread; manage at 21 DTE.
Diagonal / Poor Man's Covered Call (PMCC): Buy 90–180 DTE 0.80Δ deep ITM call, sell 21–30 DTE 0.25Δ OTM call against it.

/ CHAPTER 06 · ROLLING OPTIONS: HELPING OR HURTING?

Rolling Options Audit: When Rolling Helps vs. Compounds a Loser

Every option roll must pass a 4-point quantitative test: Net Credit/Debit, Breakeven Shift, Risk/Reward Change, and Capital Lockup.

HELPING Roll #1 — Defensive Credit Roll (Short Put/Spread): Rolling out 21–30 DTE AND down in strike for a NET CREDIT improves breakeven without adding max loss.
HELPING Roll #2 — Winner Reset (Long Debit/Call): Taking profits out of an appreciated ITM call (+150%) and rolling up to a higher strike using house money locks in principal.
HURTING Roll #1 — Paying a Net Debit to Extend a Losing OTM Option: Rolling a losing long option out in time for extra debit increases capital at risk on a broken thesis.
HURTING Roll #2 — Doubling Contracts to Roll for 'Even': Increasing contract count to force a credit doubles tail risk in a trending move against you.

/ CHAPTER 07 · PORTFOLIO CONSTRUCTION & ASSET CLASSES

Multi-Asset Allocation: Equities, Bonds/Treasuries, Energy & Crypto

Balance high-beta growth equities with Treasury duration (TLT/IEF/SGOV), hard-asset inflation hedges (XLE/GLD), and asymmetric sleeves.

Core Equity Sleeve (50%–65%): Diversify across low-correlation sectors; cap any single stock at ≤12% at cost (≤18% at market).
Fixed Income & Treasury Sleeve (15%–30%): Use SGOV/SHY (0–3Y T-Bills) in rising-rate regimes; shift to IEF (7–10Y) & TLT (20Y+) when Fed cuts.
Hard Assets & Energy Sleeve (5%–15%): XLE, uranium/grid infrastructure, and GLD protect portfolio purchasing power during CPI/supply shocks.
Asymmetric / Crypto Sleeve (2%–10%): Size BTC/ETH/SOL so a -50% drawdown impacts total portfolio equity by ≤2.5%.

/ CHAPTER 08 · INSTITUTIONAL & INSIDER FLOW

Trading 13F Institutional, 13D Activist, Form 4 Insider & Congress Filings

How to separate high-signal cluster insider buying and new 13D activist stakes from noisy routine filings.

Form 4 Open-Market Cluster Buys (Code P): Highest signal when CEO + CFO + 1 Director buy >$250K in the open market within 10 trading days.
Schedule 13D Activist Stakes (≥5%): Filed within 10 days of crossing 5% with active intent (board seats, spin-off, buyback).
13F-HR Multi-Manager Conviction: Track new positions where ≥3 top Tiger/Quant/Value funds initiate >2% portfolio weight in the same quarter.
Congressional PTR Filings: Watch committee-aligned purchases disclosed within 30–45 days under the STOCK Act.

/ CHAPTER 09 · MARKET REGIME ENGINE

Reading the 4 Market Regimes: Trend Bull, Volatile Bull, Chop & Risk-Off Bear

70% of a stock's move comes from market & sector regime. Adjust gross exposure and target R-multiples to the active regime.

Regime 1 — Low-Vol Uptrend (SPY > 21 EMA > 50 SMA, VIX < 17): 80–100% gross exposure; buy breakouts & 21 EMA pullbacks; trail for +3R to +5R.
Regime 2 — High-Vol Uptrend (SPY > 50 SMA, VIX 18–24): 50–70% exposure; buy pullbacks only (never gap-ups); take 1/2 off at +1.5R.
Regime 3 — Choppy Range (SPY criss-crossing flat 50 SMA): 25–40% exposure; favor Iron Condors, credit spreads, and T-Bill yield (SGOV).
Regime 4 — Risk-Off Bear (SPY < declining 50 SMA & 200 SMA, VIX > 25): Raise 50–80% cash/SGOV; hedge with index put spreads.

/ CHAPTER 10 · POST-TRADE JOURNAL & EXPECTANCY

Win/Loss Journaling, Profit Factor & Eliminating Leakages

Track Win Rate, Average Win (R), Average Loss (R), and Expectancy = (Win% × AvgWin) − (Loss% × AvgLoss) across every setup tag.

Expectancy Formula: E = (Win% × Avg Win R) − (Loss% × Avg Loss R). A 42% win-rate trader with +2.8R avg win and -1.0R avg loss nets +0.60R per trade.
Profit Factor = Gross Wins ($) ÷ Gross Losses ($). Target Profit Factor ≥ 1.75x across every rolling 20-trade block.
Tag Every Mistake: FOMO Chasing (>2 ATR above 21 EMA), Stop Violation (holding past -1R), Premature Exit (<+1R), or Oversizing.
Weekly Friday Audit: Delete or prune broken setups with Profit Factor < 1.1x and double down on your top 2 highest-expectancy tags.

/ COMPLETE A–Z TRADING, OPTIONS GREEKS, SEC FILINGS & PORTFOLIO GLOSSARY

A–Z Desk Glossary (85 Terms)

1R (One Unit of Risk) Risk Management

The exact dollar amount risked between your entry price and hard stop price on a single trade (typically 0.5%–1.0% of desk equity).

2R / 3R Multiple Risk Management

Profit measured as a multiple of initial risk 1R. Risking $500 to make $1,500 is a +3.0R winner.

13D Filing (Schedule 13D) SEC Filings

Mandatory SEC filing within 10 days when an investor acquires ≥5% of a public company with active/activist intent.

13F-HR Filing SEC Filings

Quarterly SEC holdings report filed by institutional investment managers with ≥$100M in U.S. exchange-traded equities.

13G Filing (Schedule 13G) SEC Filings

Passive ≥5% beneficial ownership filing for institutions not seeking control changes.

21 EMA (Exponential Moving Average) Technicals

The primary institutional swing-trading trend filter; leading stocks surf above a rising 21-day EMA.

50 SMA / 200 SMA Technicals

50-day and 200-day Simple Moving Averages used by institutions to define intermediate and secular Stage-2 uptrends.

Alpha (vs. SPY) Portfolio Analytics

Excess return generated by a portfolio or model above the S&P 500 (SPY) benchmark over the same start date.

Assignment Risk Options

The obligation of an option seller to buy (short put) or deliver (short call) 100 shares per contract when exercised.

ATR (Average True Range) Volatility

14-period average daily trading range including gaps; used to calibrate stop distance and spot over-extension.

Beta Portfolio Analytics

Sensitivity of an asset or portfolio to a 1% move in the S&P 500.

Bid-Ask Spread Execution

Difference between highest bid and lowest ask; tight spreads (<0.05%) minimize slippage.

Breakeven Price (Options) Options

Underlying price at expiration where net P&L equals $0 (Call BE = Strike + Debit; Put BE = Strike − Debit).

Bull Call Vertical Spread Options

Defined-risk bullish debit spread: buy lower-strike call, sell higher-strike call in the same expiration.

Bull Put Credit Spread Options

Defined-risk bullish/neutral credit strategy: sell higher-strike OTM put, buy lower-strike put protection.

Calendar (Time) Spread Options

Sell near-term option and buy longer-dated option at the same strike to harvest faster front-month Theta decay.

Call Option Options

Contract giving the buyer the right (not obligation) to purchase 100 shares at the strike price on or before expiration.

Cash-Secured Put (CSP) Options

Selling an OTM put while holding 100% cash collateral to acquire stock at an effective discount or keep the credit.

Closing Auction (MOC) Execution

4:00 PM ET market-on-close institutional liquidity event where daily closes and systematic signals finalize.

Covered Call Options

Owning 100 shares of stock and selling 1 OTM call against it to generate income and reduce cost basis.

Credit Roll Options Adjustments

Closing an existing short option/spread and opening a later-dated position for a net cash credit.

Dark Pool Print Market Structure

Off-exchange institutional block trade reported to the consolidated tape.

Debit Roll Options Adjustments

Paying additional capital to extend or shift an option position; requires strict thesis re-underwriting.

Delta (Δ) Options Greeks

Expected option price change per $1.00 move in the underlying stock (also approximates probability of expiring ITM).

Diagonal Spread / PMCC Options

Long deep-ITM LEAPS or 90–180 DTE option paired with a short near-term OTM option at a further strike.

Drawdown (Max DD) Portfolio Analytics

Peak-to-trough percentage decline in portfolio equity before a new high-water mark is reached.

DTE (Days to Expiration) Options

Calendar days remaining until an option contract expires; Theta decay accelerates inside 35 DTE.

Duration (Treasury Sensitivity) Fixed Income

Sensitivity of bond/Treasury ETF price (TLT, IEF, SGOV) to a 1% change in interest rates.

Earnings Drift (PEAD) Catalysts

Post-Earnings Announcement Drift: tendency of stocks with beat-and-raise surprises to trend for weeks.

Expectancy (E) Journal Analytics

Average R-multiple earned per trade: (Win Rate × Avg Win R) − (Loss Rate × Avg Loss R).

Extrinsic (Time) Value Options

Portion of an option's premium above intrinsic value, driven by time remaining and implied volatility.

Form 4 Insider Filing SEC Filings

SEC report required within 2 business days when an officer, director, or 10% owner buys or sells company stock.

Free Cash Flow (FCF) Yield Fundamentals

Operating Cash Flow minus CapEx divided by Market Cap or Enterprise Value.

Gamma (Γ) Options Greeks

Rate of change of Delta per $1.00 move in the underlying; peaks for ATM options near expiration.

Gamma Squeeze Market Structure

Rapid price acceleration caused by market makers buying underlying shares to hedge short call Gamma.

Gross Exposure Portfolio Analytics

Total long % plus total short % invested in the market (excluding cash/SGOV).

Hard Stop (Invalidation) Risk Management

Price level that proves the trade thesis wrong and triggers an unconditional exit.

High-Water Mark Portfolio Analytics

The highest historical cumulative equity value achieved by a portfolio or model.

Implied Volatility (IV) Options

Market's forward-looking annualized standard deviation priced into option premiums.

Intrinsic Value Options

Immediate in-the-money value of an option: max(0, Stock − Strike) for calls; max(0, Strike − Stock) for puts.

Iron Condor Options

Defined-risk neutral strategy combining a Bull Put Credit Spread and a Bear Call Credit Spread.

IV Crush Options

Sharp contraction in Implied Volatility immediately after a binary catalyst (earnings, FDA, FOMC).

IV Percentile / IV Rank (IVR) Options

Where current IV sits relative to its 52-week high/low range (0% to 100%).

Kelly Criterion (Fractional) Risk Management

Mathematical optimal bet-sizing formula based on edge and odds; traders use Half- or Quarter-Kelly to cap volatility.

LEAPS Options

Long-Term Equity Anticipation Securities: option contracts with 9 to 24+ months until expiration.

Limit Order Execution

Order specifying the maximum price to pay (buy) or minimum price to accept (sell).

Liquidity / ADR% Technicals

Average Daily Dollar Volume and Average Daily Range %, measuring how easily size can enter and exit.

Long Straddle / Strangle Options

Buying both a call and a put to profit from a massive volatility move in either direction exceeding implied move.

Margin of Safety Fundamentals

Discount between market price and conservative intrinsic valuation.

Market Breadth (A/D Line) Market Regime

Participation measure comparing advancing vs. declining stocks and % of stocks above 50 SMA.

Max Pain / Pin Risk Options

Expiration price cluster with high open interest where short-gamma hedging pins the stock near 4:00 PM Friday.

Mean Reversion Strategy Type

Fading extreme multi-standard-deviation extensions back toward VWAP or the 21 EMA.

Momentum / Relative Strength (RS) Technicals

Outperformance of a stock vs. SPY over 3-, 6-, and 12-month lookbacks.

Net Exposure Portfolio Analytics

Long % minus Short %, measuring directional sensitivity to the overall market.

Open Interest (OI) Options

Total number of outstanding open option contracts held overnight at a given strike and expiration.

Opening Range Breakout (ORB) Setups

Breakout above or below the high/low established during the first 5, 15, or 30 minutes of the regular session.

Pin Bar / Hammer Technicals

Candlestick showing strong rejection of lower prices with a long lower wick and close near the high of the bar.

Pocket Pivot Setups

Early base breakout up-day whose volume exceeds the highest down-day volume of the prior 10 sessions.

Portfolio Heat Risk Management

Sum of open 1R risk across all active positions if every stop were hit simultaneously.

Profit Factor Journal Analytics

Gross Dollars Won divided by Gross Dollars Lost; >1.75 indicates strong systematic execution.

Put Option Options

Contract giving the buyer the right to sell 100 shares at the strike price on or before expiration.

Put/Call Ratio Sentiment

Ratio of traded put volume to call volume; extreme spikes (>1.25) often mark contrarian fear washes.

Rebalance Diff Portfolio Analytics

Audit trail showing Added, Removed, Increased, and Trimmed holdings between two model rebalances.

Relative Volume (RVOL) Technicals

Current volume divided by average volume for the same time of day; RVOL > 2.0x confirms institutional participation.

Regime Filter Market Regime

Quantitative rule (e.g., SPY > 200 SMA & VIX < 22) that governs whether long breakout models deploy capital.

Rho (ρ) Options Greeks

Option sensitivity to a 1% change in risk-free interest rates.

Risk-Reward Ratio (R:R) Risk Management

Distance to target divided by distance to stop (e.g., $6.00 target / $2.00 stop = 3.0:1 R:R).

Roll Out & Down / Up Options Adjustments

Closing a near-term option and simultaneously opening a longer-dated option at a lower or higher strike.

Sector Rotation Macro

Capital flows shifting between Cyclicals, Tech, Energy, Financials, and Defensives across the business cycle.

SGOV / T-Bill Cash Sleeve Fixed Income

0–3 Month U.S. Treasury ETF used as a risk-free dry-powder yield sleeve inside multi-asset portfolios.

Sharpe Ratio Portfolio Analytics

Annualized excess return over the risk-free rate divided by annualized return volatility.

Short Interest (% of Float) Market Structure

Percentage of tradable float currently sold short and not yet covered.

Skew (Put vs. Call IV) Options

Difference in implied volatility between OTM puts and equidistant OTM calls.

Slippage Execution

Difference between expected trigger price and actual fill price.

Sortino Ratio Portfolio Analytics

Risk-adjusted return ratio that penalizes only downside volatility rather than upside gains.

Stage 2 Uptrend Technicals

Stan Weinstein trend phase where price trades above a rising 50-day and 200-day moving average with higher highs.

Stop-Limit vs. Stop-Market Execution

Stop-Market guarantees execution once triggered; Stop-Limit guarantees price but risks non-fill in a gap.

Theta (Θ) Options Greeks

Daily time decay of an option's extrinsic value, accelerating inside the final 30 days before expiration.

TLT / Long-Duration Treasury Fixed Income

20+ Year U.S. Treasury Bond ETF used for deflation/recession hedging and rate-cut duration alpha.

Trailing Stop Risk Management

Dynamic stop that ratchets upward below rising swing lows or moving averages (10 EMA / 21 EMA) to lock in gains.

VCP (Volatility Contraction Pattern) Setups

Constructive base where each successive pullback is shallower and volume dries up ahead of pivot breakout.

Vega (ν) Options Greeks

Option price change for each 1.0% change in Implied Volatility (IV).

Vertical Spread Options

Buying one option and selling another of the same type and expiration at a different strike.

VIX (Cboe Volatility Index) Market Regime

30-day implied volatility of S&P 500 index options; gauges institutional hedging demand.

VWAP (Volume-Weighted Average Price) Technicals

Intraday institutional benchmark calculated as cumulative (Price × Volume) ÷ cumulative Volume from 9:30 AM.