Goals: analyze entry and exit points, examine volatilities of different months and choose from a multitude of strategies in order to pick the type of options position which is most likely to meet your trading goals.
Risk Reward Ratio: is the contract big enough and are the potential gains large enough to cover commissions and slippage? If an individual trades small contracts and the costs of trading are too high as a percentage of the potential gains, then it is very difficult to make money in the long run.
Liquidity: if there isn't depth to the market, then it is not worth putting on a position. It will be too costly to get in and out of the position. Executions costs must be examined when considering the profitability outlook. Looking at quotes and understanding execution prices can determine whether an options series is the right one to trade. Examine the Bid/Ask Spread as a % of the asset.
Implied vs. Historical Volatility: whether you are getting long or short options, it is important to gain insight into the relative value of the options you are trading. Implied Volatility is the market's expectation of future volatility, but it must be analyzed in terms of the market's Historical Volatility.
Skew: the skew enables a trader to create interesting trading opportunities that would not exist in a market with a flat implied volatility curve. By analyzing the skew, a trader can initiate a position that meets his or her trading objectives and provides a theoretical advantage in establishing the position.
Gamma: when establishing a position in options, understanding the gamma of your position is essential in understanding the ramifications of your risk-reward profile. Gamma provides one who is long options tremendous opportunity to experience delta change due to price changes in the underlying market. Managing these changes can provide significant opportunity for profit. On the short side, negative gamma has blown out many traders. Gamma must be considered and understood when trading large options positions.
Vega: when selling options the trader must understand the potential risk to the position due to changes in implied volatility. Due to large increases in implied volatility, traders often have trouble meeting margin requirements which are caused by movements in Vega. Analysis of this is important before the position is established. Certain markets have histories of large volatility explosions. Selling large quantities of volatility in certain stocks or asset classes, when the implied volatility is historically low, can be a disaster.