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What a 2023 Options Trade Taught Me About Process and Structure
- Feb 3
- 6 min read
Updated: May 27
I do not hold an Australian Financial Services Licence. Nothing in this post is personal or general financial advice or a recommendation in relation to any financial product. This is a personal reflection on a historical trade and what it taught me about process.
This is the story of one structured options trade I took in mid 2023 and what it actually taught me. It is not a trade recipe. It is not a setup you can replicate from a paragraph. It is a lesson about why structure beats speculation, told through one of the first trades where the ITPM framework really clicked for me.
Introduction
Let's be honest. Most retail traders fall into the same trap.
They see a stock that has been beaten up. They think there is a bounce coming. They jump in with size, no plan, no defined risk, no exit, no idea what the catalyst actually is. Sometimes it works. Most of the time it does not.
The trade I want to talk about was the opposite of that. It worked because every part of it was structured. The setup. The position size. The catalyst. The exit logic. The risk that was defined before I clicked buy. Looking back, the return was almost beside the point. The lesson was the process.
The Setup I Was Looking For
This was July 2023. The regional banking sector had been beaten up since the Silicon Valley Bank collapse in March. Sentiment on the group was at one of those moments where the narrative had run far ahead of the underlying numbers.
Inside the ITPM framework that is a recognisable shape. A specific kind of asymmetric setup. The sector is being punished broadly. The market is not separating the names with genuinely impaired balance sheets from the names that have been dragged down by association. Sentiment is one sided. Implied volatility is elevated, which makes options structurally interesting if you can find a specific catalyst worth positioning around.
The work was not finding a name. The work was building a thesis on the right name. That meant going through the regional bank cohort, looking at deposit trends, liquidity, margin trajectory, and most importantly looking at where the consensus narrative was lagging what management was actually saying.
One name fit the shape. A regional bank with stabilising deposits, stronger than expected liquidity, conservative guidance that left room for an upside surprise, and a quarterly earnings print coming up that was likely to be the catalyst. The market had not caught up to what the numbers were quietly showing.
How the Structured Process Worked
Here is what made the trade structured rather than speculative.
The risk was defined before the position was opened. A specific amount of capital allocated, capped at the option premium, no possibility of losing more than the defined risk regardless of what the underlying did.
The catalyst was specific. Earnings on a known date. That meant the option expiry I chose lined up with the catalyst, rather than buying time I did not need.
The position size was deliberate. Sized to fit inside a broader long-short book, not as a standalone hero trade. If it did not work, the book absorbed it.
The exit plan was written down before the entry. If the earnings print confirmed the thesis, the position would be partially closed on the catalyst and the remainder rolled or held into the next catalyst. If the print broke the thesis, the position would close at a defined loss point.
None of that is glamorous. All of it is the difference between a process driven trade and a punt.
The Outcome at a High Level
The earnings print came in and broadly confirmed the thesis. The position was partially closed into strength. The remaining piece was managed down as the post-earnings move played out.
The return on the premium risked was strong. I am deliberately not posting the specific contracts, strikes, expiries or entry and exit premium prices, because they are not the lesson and reading them does not help anyone. The lesson is the structure. Specific trade detail just tempts pattern matching from a single example.
Past performance is not indicative of future results. Options trading carries the risk of losing the entire premium on every position. One trade is one trade. The maths only works when the process is run consistently across many trades.
Four Lessons From This Trade
These are the lessons that matter. They are portable. The specific trade is not.
Markets overshoot in panic. The narrative often lags what the numbers are actually showing. The work is not in finding the asymmetry. The work is in separating the names where it is real from the names where it is not.
Earnings season resets sentiment faster than anything else. If your thesis depends on the market noticing something, an earnings catalyst is the most reliable forcing function.
Options work best with a defined catalyst. Do not just buy time. Buy timing. Match the expiry to the catalyst date, not to a general view about how long the move might take.
A trade that worked is different from a trade you should copy. The point of this post is to show how structure changes the shape of an outcome, not to give you a template to replay on the next beaten down sector. Markets do not repeat. Process does.
Why Structure Matters More Than the Outcome
It is easy to read a story like this and focus on the return. Do not.
If I had taken the exact same setup with no defined risk, no catalyst alignment, no exit plan, the outcome would have been different. Maybe better. Maybe worse. Almost certainly more emotionally driven. And not repeatable.
The reason I keep coming back to this trade is not the return. It is the first time I traded a position end to end inside the ITPM framework. Plan. Size. Catalyst. Exit. Manage. That sequence is what makes the maths work over a year, not a single big winner.
You are not chasing a hero trade. You are running a process. The wins look after themselves when the process is honest.
Why this only works with the right education
If you have read this far, you already understand the thing most retail traders miss.
It is not about finding the next big trade. It is about having a structured system and the discipline to execute it consistently, across many trades, through good months and slow ones.
That is what PTM 2.0 is built around. It is the framework that turned trades like this one from one off events into part of a repeatable process.
For the wider course context, my ITPM reviews cover the full curriculum. If you want the discount, my code ptmcutts30pct is on the ITPM discount page.
Affiliate disclosure. I earn a commission if you purchase an ITPM course through my discount link, at no additional cost to you. That does not change my view of the courses, which is based on having completed them myself.
Key Takeaways
Structure is what separates a process driven trade from a punt.
A defined risk, a specific catalyst, deliberate sizing and a written exit plan are non negotiable.
One trade is one trade. The framework only works over many trades, not because of one outlier.
Specific trade detail is not portable. The process is.
Past performance is not indicative of future results. Options trading carries the risk of losing the full premium on every position.
Disclaimer
I am a retail trader based in Australia. I do not hold an Australian Financial Services Licence. Nothing on this website is personal or general financial advice or a recommendation in relation to any financial product. Past performance is not indicative of future results. Options trading carries substantial risk including the risk of losing the entire premium on every position. Please consult a qualified licensed financial adviser before making any investment or trading decision.
The information contained in this article is provided for general informational and educational purposes only and does not constitute financial, investment, or other professional advice. The content reflects the personal opinions of the author based on publicly available information at the time of writing and should not be relied upon as the basis for any investment decisions.
Readers are strongly encouraged to conduct their own research and due diligence, and to consult with a qualified financial advisor or licensed professional before making any investment or trading decisions. The author and publisher make no representations or warranties, express or implied, as to the accuracy, completeness, or reliability of the information provided and accept no liability for any loss or damage arising directly or indirectly from the use of or reliance on the information herein.
