Appearance
Option Strategies
- At the Money (ATM):
- In the Money (ITM):
- Call Option:
- Put Option:
- Out the Money (OTM)
- Call Option:
- Put Option:
Long Call
Short Call
Long Put
Short Put
Cash Secured Put (CSP)
- Always write a CSP when the stock is down. You get a better premium.
- Always write a CSP of a stock you don't mind owning.
- If it does get assigned, then you can write covered calls and do the reverse.
- if the stock keeps going higher, you pocket the premium.
Income Strategies
Covered Call(CC)
Strategy Details | |
---|---|
Strategy Type | Cautiously Bullish |
# of legs | 2 (Long the Underlying + Short OTM Call) |
Covered Put
Vertical Spreads
Bull Call Spread
Bear Call Spread
Bear Put Spread
Strategy Details | |
---|---|
Strategy Type | Moderately bearish |
# of legs | 2 (Long ATM Put + Short OTM Put) |
Maximum Risk | Premium(long Put - short Put) |
Maxinum Reward | Strike Price(long Put - short Put) - Premium(long Put - short Put) |
Bull Put Spread
Strategy Details | |
---|---|
Strategy Type | Moderately bullish |
# of legs | 2 (Short OTM Put (high strike) + Long OTM Put(low strike)) |
Maximum Risk | Strike Price(short Put - long Put) - Premium(long Put - short Put) |
Maxinum Reward | Premium(long Put - short Put) |
Protection Strategies
Married Put
Protective Collar
Horizontal Strategies
Long Call Calendar
Long Put Calendar
Long Call Diagonal
Short Call Diagonal
Long Put Diagonal
Short Put Diagonal
Straddle and Strangle
Long Straddle
Strategy Details | |
---|---|
Strategy Type | Neutral on direction, but bullish on volatility |
# of legs | 2 (Long ATM Call + Long ATM Put) |
Maximum Risk | Limited to the extent of net premium paid |
Maxinum Reward | Potentially unlimited |
Short Straddle
Strategy Details | |
---|---|
Strategy Type | Neutral on direction, but bearish on volatility |
# of legs | 2 (Short ATM Call + Short ATM Put) |
Maximum Risk | Potentially unlimited |
Maxinum Reward | Limited to the extent of net premium received |
Long Strangle
Strategy Details | |
---|---|
Strategy Type | Neutral on direction, but bullish on volatility |
# of legs | 2 (Long OTM Call + Long OTM Put) |
Maximum Risk | Limited to the extent of net premium paid |
Maxinum Reward | Potentially unlimited |
Short Strangle
Strategy Details | |
---|---|
Strategy Type | Neutral on direction, but bearish on volatility |
# of legs | 2 (Short OTM Call + Short OTM Put) |
Maximum Risk | Potentially unlimited |
Maxinum Reward | Limited to the extent of net premium received |
Butterfly Strategies
Long Call Butterfly
Short Call Butterfly
Long Put Butterfly
Short Put Butterfly
Long Iron Butterfly
Short Iron Butterfly
Condor Strategies
Long Call Condor
Short Call Condor
Long Put Condor
Options:
- Buy a put option at a lower and out-of-the-money (OTM) strike price (
Put 1
). - Sell a put option at a lower middle and out-of-the-money (OTM) strike price (
Put 2
). - Sell a put option at a higher middle and in-of-the-money (ITM) strike price (
Put 3
). - Buy a put option at a higher and in-of-the-money (ITM) strike price (
Put 4
).
- Buy a put option at a lower and out-of-the-money (OTM) strike price (
Strike Price:
- Expiration date: Same
Short Put Condor
Options:
- Sell a put option at a lower and out-of-the-money (OTM) strike price (
Put 1
). - Buy a put option at a lower middle and out-of-the-money (OTM) strike price (
Put 2
). - Buy a put option at a higher middle and in-of-the-money (ITM) strike price (
Put 3
). - Sell a put option at a higher and in-of-the-money (ITM) strike price (
Put 4
).
- Sell a put option at a lower and out-of-the-money (OTM) strike price (
Strike Price:
- Expiration date: Same
Long Iron Condor
Options:
- Sell a put option at a lower strike price (
Put 1
). - Buy a put option at a higher strike price (
Put 2
). - Buy a call option at a lower strike price (
Call 1
). - Sell a call option at a higher strike price (
Call 2
).
- Sell a put option at a lower strike price (
Strike Price:
- Expiration date: Same
Short Iron Condor
- Options:
- Sell a put option at a lower strike price (
Put 2
). - Buy a put option at an even lower strike price (
Put 1
). - Sell a call option at a higher strike price (
Call 1
). - Buy a call option at an even higher strike price (
Call 2
).
- Sell a put option at a lower strike price (
- Strike Price:
- Expiration date: Same
- Maximum Profit:
- Maximun Loss:
- Market Outlook:
Traders expect the underlying asset will remain within the price range betweenPut 2 Strike
andCall 1 Strike
until expiration.