THE VIBES FRAMEWORK
Five questions before a trade.
VIBES stands for Variables, Information, Broker, Energy and Savings. It is a way to review a speculative idea, record what supports it and decide whether the dollars at risk fit your own limit.
You can use it with hypothetical trades. Completing the questions gives you a written plan; it does not establish that a trade will make money.
Variables: understand the instrument.
A stock thesis and an option contract are different things. For an option, record the call or put, strike, expiration, premium, multiplier and quantity. Check liquidity, volatility and how much time the idea needs.
A useful question is: what must happen, by when, and what happens if it does not? A move in the right direction may still leave an option worth less if timing or pricing works against you.
Write down: the instrument, relevant contract terms, entry conditions and what would invalidate the setup.
Information: make evidence traceable.
Name the catalyst and link to its public source. Record when you checked it. Separate a confirmed fact, such as a scheduled announcement, from your assumption about how the market will react.
Include the strongest countercase: the news may already be priced in, the event may be delayed, or a different factor may dominate the price. An unsupported assumption remains an unanswered question.
Write down: the thesis, dated sources, countercase and evidence that would change your mind.
Broker: check the trade you can actually execute.
Inspect the bid/ask spread, available liquidity, order type, fees and exit mechanics. A displayed quote is not a guaranteed fill. Check your broker's exercise and expiration procedures before considering an option position.
For a prediction-market contract, read the market's actual resolution rules, deadlines and settlement terms. A headline that sounds relevant may not satisfy those rules.
Write down: the planned order, costs, exit conditions and settlement details that matter to this instrument.
Energy: separate the market from your impulse.
Record the sector or public narrative around the idea, then describe your own reason for wanting it. Enthusiasm, urgency and fear of missing out are feelings to examine; they do not replace evidence.
Ask what you would think if you had no position and no need to act today. If the price or evidence changes, revisit the plan before acting.
Write down: the market context, your emotional state and the conditions under which you would pass.
Savings: protect money needed elsewhere.
Set a dollar limit after bills, emergency savings and business costs. Account for money already exposed to loss. A promising thesis does not make essential savings available for speculation.
For a cash-funded long option, premium × multiplier × contracts + estimated fees gives a full-loss estimate for the option purchase. Exercise can create a stock position with different risks; the calculator excludes that position.
Write down: your limit, existing exposure, proposed cost and whether a total loss would affect essentials.
Calculate the option dollarsTurn the review into a record.
Keep the five answers with your thesis, entry conditions, invalidation and exit plan. After a hypothetical or completed trade, compare the actual outcome with the decision you documented. A profitable outcome can follow a weak process, and a well-documented plan can lose.
Use the free pre-trade checklist or explore the VIBES field guide and Excel trade journal.