Background
Tom Sosnoff is the founder of tastytrade (now IG-owned) and the creator of the thinkorswim platform (sold to TD Ameritrade for $750M). He is the most influential options trading educator alive, having made over 1,000 hours of free educational content advocating for mechanical, probability-based options selling. His philosophy: trade small, trade often, collect premium.
Core Methodology
Sosnoff's approach is based on selling options premium — specifically selling strangles and iron condors at 45 days to expiration (DTE) and the 16-delta strike (one standard deviation out-of-the-money). The mathematical foundation: options are statistically overpriced relative to realised volatility, so consistent premium sellers capture the variance risk premium over time.
Key Trading Rules
- Sell premium at 45 DTE — optimal balance of time decay (theta) and gamma risk
- Use 16-delta strikes for short strangles — one standard deviation out-of-the-money on each side
- Manage winners at 50% of max profit — close when you've captured half the premium
- Manage losers at 21 DTE — if still open, close regardless of P&L to avoid gamma acceleration
- Trade small: no single position should risk more than 2-5% of portfolio
- Trade often: 50+ positions across uncorrelated underlyings for portfolio-level diversification
Key Concepts
Books & Resources
tastytrade.com — 1,000+ hours of free education. The Skinny on Options series. Options Crash Course. All free on YouTube and tastytrade platform.