Improve your trading skills while learning about volatility, backtesting, and risk management. Narrated by former market-maker Matt Amberson, principal and founder of ORATS.

Welcome! I’m Matt Amberson, and I am excited to share ORATS University with you. ORATS University is a culmination of lessons learned from being a Cboe market maker for 10 years, from running a trading firm for 5 years, and from over 20 years spent developing tools for options traders through my company, Option Research and Technology Services (ORATS).

Whether you're an experienced options trader or just getting started in this fascinating world, I’m excited to take you on a journey through the tools and techniques we've created at ORATS to help traders like you navigate the markets more effectively, gain an edge, and make money trading options. ORATS University is designed to help you achieve those goals by introducing you to helpful techniques, indicators, and strategies.

All of the pictures and videos included in these lessons are from the ORATS dashboard, a suite of trading tools designed to help you trade options more effectively.

Four pillars of trading

To start, I want to outline four pillars of trading that I believe serve as the roadmap to success. You can read more by clicking on the corresponding sections in the navigation menu on the left.

Research

We believe that alpha is a consequence of quality data. ORATS offers best-of-breed historical data sets and APIs to help you navigate years of options data. Additionally, since data is the backbone for research and analytics, we've built our web platform around our hundreds of proprietary indicators to give you the tools and insights you need.

One of these tools, the backtester, uses historical data to simulate your trades and see how they would have performed. Through backtesting, you can refine your strategies, analyze performance under different market conditions, and identify any weaknesses or flaws. Our proprietary indicators give you the freedom and opportunity to find your unique edge in the market.

Implementation

To find the best options trades, it's helpful to use stock and option scanners to quickly identify potential trading opportunities. Gathering market intelligence, generating trade ideas, and tracking signals are also important facets of this step. Once you've found a trade, you need to be able to execute it with speed and reliability through the broker of your choice. Knowing what price to send to the exchange is a critical skill where execution algorithms can help.

Risk

Options trading involves risk, and it's important to understand and manage that risk. This involves setting stop-loss orders to limit losses, diversifying your portfolio, and hedging your positions. By managing your risk effectively, you can minimize losses and maximize profits. Being systematic and disciplined are also key traits that help in the long run.

Review

This last pillar is an important time for reflection. Keeping a trade journal has helped myself and other traders learn and adapt our strategies to be more profitable over time. Reviewing trades also helps to compare expectations to reality (also known as "forward testing"). Developing a systematic approach to reviewing your trades helps tie all the pillars together.

Our work at ORATS

These pillars lay the foundation for all of our work at ORATS. They’ve inspired the creation of original tools and hundreds of proprietary indicators, each methodically designed around our overarching goal: to help you make money trading options.

Lessons from the past

In ORATS University, I’ll walk you through the years it took to research and develop these indicators, and how they are seamlessly integrated into many of our tools. From my years as a market-maker, to my years serving clients at ORATS, I've learned many lessons about volatility, backtesting, implementation, and several other facets of options trading that will help you gain an edge in the market.

Exploring the Why

Clients always ask me, why is X important in options trading? There are many unanswered questions traders have when learning about options. Throughout ORATS University, we’ll answer questions like:

• Why is implied volatility so important, and what does it mean?
• Why is the Black-Scholes model not suitable for modern-day options traders?
• Why is backtesting so critical?
• Why should I pay attention to earnings?

And many more.

Looking ahead

Several of the questions we’re answering in ORATS University are complicated, multi-faceted topics that require a full analysis. Thus, the lessons are presented in an order I believe is best understood by reading start to finish.

By the end of these lessons, you’ll be equipped with the knowledge and tools necessary to become a successful options trader. My work at ORATS is never done, and if you have any feedback or ideas after reading this, I’m happy to listen.