Option Strategy Guides
Learn when to use each strategy, how to manage the position, and what to watch for. Each guide includes breakeven formulas, capital requirements, and practical management tips.
Structures for a rising or resilient underlying
Bullish Strategies
Long Call
A call purchase with defined premium at risk and open-ended upside at expiration.
Covered Call
Long shares with a short call, exchanging upside for option premium.
Bull Call Spread
Long lower-strike call financed by short higher-strike call.
Bull Put Spread
Short higher-strike put with protective lower-strike put.
Protective Put
Long shares with long put establishing price floor.
Cash-Secured Put
Short put backed by cash sufficient for assignment.
Call Ratio Backspread
Short lower-strike call with two long higher-strike calls.
Bull Call Ladder
Bull call spread with additional short call at higher strike.
Synthetic Long Stock
Long call and short put at same strike mimic long stock.
Bullish Risk Reversal
Long call financed by short lower-strike put.
Structures for a falling or weakening underlying
Bearish Strategies
Long Put
Put purchase with defined premium at risk and downside.
Bear Put Spread
Long higher-strike put financed by short lower-strike put.
Bear Call Spread
Short lower-strike call with protective higher-strike call.
Covered Put
Short shares with short put limiting profit below strike.
Put Ratio Backspread
Short higher-strike put with two long lower-strike puts.
Bear Put Ladder
Bear put spread with additional short put.
Synthetic Short Stock
Short call and long put at same strike mimic short stock.
Structures centered on a range or target price
Neutral Strategies
Short Straddle
Short call and put at same strike benefit from flatness.
Short Strangle
Short OTM call and put create wider profit region.
Iron Condor
Defined-risk put and call spreads create profit range.
Iron Butterfly
Short straddle with protective wings defining risk/reward.
Long Call Butterfly
Three-strike call structure concentrates payoff at middle.
Long Put Butterfly
Three-strike put structure concentrates payoff at middle.
Call Calendar Spread
Same-strike call calendar approximated at expiration.
Put Calendar Spread
Same-strike put calendar approximated at expiration.
Collar
Long shares with put floor and call ceiling.
Short Guts
Short ITM call and put seek limited movement.
Structures shaped around the size of a move
Volatility Strategies
Long Straddle
Long call and put at same strike benefit from large move.
Long Strangle
Out-of-money call and put seek large move.
Strip
One long call and two long puts emphasize downside.
Strap
Two long calls and one long put emphasize upside.
Reverse Iron Condor
Bear put and bull call spreads seek movement beyond wings.
Reverse Iron Butterfly
Long spreads centered on strike seek movement from body.
Long Guts
In-the-money call and put create two-sided volatility.
Calculate Strategy Payoffs Interactively
Each strategy guide links to an interactive calculator where you can model payoffs with your specific strikes and premiums.
View All Strategy Calculators