BearishIntermediate
Bear Call Spread
Selling a lower-strike call and buying a higher-strike call to receive credit while defining upside risk.
- Maximum riskStrike width minus credit
- Maximum rewardCredit received
Options Strategies
Compare outlook, maximum risk, reward profile, time decay, volatility exposure, and complexity before studying a strategy in depth.
BearishBeginner+
Bear Put Spread
Buying a higher-strike put and selling a lower-strike put with the same expiration to define bearish risk and cap reward.
- Maximum riskNet debit paid
- Maximum rewardStrike width minus net debit
BullishBeginner+
Bull Call Spread
Buying a call and selling a higher-strike call with the same expiration to create defined bullish risk and capped reward.
- Maximum riskNet debit paid
- Maximum rewardStrike width minus net debit
BullishIntermediate
Bull Put Spread
Selling a higher-strike put and buying a lower-strike put to receive credit while defining downside risk.
- Maximum riskStrike width minus credit
- Maximum rewardCredit received
NeutralAdvanced
Calendar Spread
Selling a nearer-dated option and buying a farther-dated option at the same strike to create time- and volatility-dependent exposure.
- Maximum riskNet debit, generally
- Maximum rewardVariable and not fixed at entry
NeutralBeginner+
Cash-Secured Put
Selling a put while maintaining enough cash to buy the shares if assigned.
- Maximum riskStrike price minus premium if underlying falls to zero
- Maximum rewardPremium received
NeutralBeginner+
Covered Call
Holding shares while selling a call against those shares, receiving premium in exchange for accepting an obligation to sell at the strike.
- Maximum riskSubstantial stock downside minus premium received
- Maximum rewardLimited to call strike appreciation plus premium
BullishAdvanced
Diagonal Spread
Using different strikes and expirations, commonly buying a longer-dated option and selling a shorter-dated option.
- Maximum riskNet debit and assignment-related exposure
- Maximum rewardVariable
NeutralAdvanced
Iron Butterfly
Combining a short call and put at the same strike with protective wings to define risk and collect credit.
- Maximum riskWing width minus credit
- Maximum rewardNet credit received
NeutralIntermediate
Iron Condor
Combining a bull put spread and bear call spread to collect credit within a defined range.
- Maximum riskLarger wing width minus credit, adjusted for asymmetry
- Maximum rewardNet credit received
BullishBeginner
Long Call
Buying a call for the right—but not the obligation—to buy the underlying at the strike price during the contract term.
- Maximum riskPremium paid
- Maximum rewardTheoretically unlimited
BearishBeginner
Long Put
Buying a put for the right—but not the obligation—to sell the underlying at the strike price during the contract term.
- Maximum riskPremium paid
- Maximum rewardSubstantial but limited by underlying reaching zero
VolatileIntermediate
Long Straddle
Buying a call and put at the same strike and expiration to seek a large move in either direction.
- Maximum riskTotal premium paid
- Maximum rewardUnlimited upside; substantial downside payoff toward zero
VolatileIntermediate
Long Strangle
Buying an out-of-the-money call and out-of-the-money put with the same expiration to seek a large move.
- Maximum riskTotal premium paid
- Maximum rewardUnlimited upside; substantial downside payoff toward zero
BullishAdvanced
Poor Man’s Covered Call
A call diagonal often built with a deep-in-the-money longer-dated call and repeated shorter-dated short calls.
- Maximum riskNet debit and complex assignment/exposure risk
- Maximum rewardVariable and capped during each short-call cycle
ProtectiveIntermediate
Protective Collar
Owning shares, buying a protective put, and selling a call to offset some or all of the put cost while capping upside.
- Maximum riskDefined range below stock price, plus net premium
- Maximum rewardLimited by short-call strike
ProtectiveBeginner+
Protective Put
Owning shares and buying a put to establish a potential downside floor for a limited period.
- Maximum riskStock decline to put strike plus put premium and basis considerations
- Maximum rewardStock upside minus put cost
NeutralAdvanced
Short Straddle
Selling a call and put at the same strike and expiration to collect premium while accepting substantial two-sided risk.
- Maximum riskUnlimited upside and substantial downside
- Maximum rewardTotal credit received
NeutralAdvanced
Short Strangle
Selling an out-of-the-money call and put to collect premium while accepting substantial tail risk.
- Maximum riskUnlimited upside and substantial downside
- Maximum rewardTotal credit received
NeutralIntermediate
Wheel Strategy
A sequence commonly described as selling cash-secured puts, accepting assignment, then selling covered calls.
- Maximum riskSubstantial equity downside
- Maximum rewardPremium plus limited stock appreciation depending on stage