Learn Option Strategies

Buy a call option to profit from a strong upward move with limited downside equal to the premium paid.

Legs

Buy 1 ATM/OTM Call

Best When

Strong directional bullish view with elevated momentum.

Buy a put option to profit from a sharp downside move. Risk is capped at the premium paid.

Legs

Buy 1 ATM/OTM Put

Best When

Expecting a strong downside breakdown or hedging long equity.

Debit spread that limits both reward and risk. Lower cost than a naked long call with defined max loss.

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Buy lower-strike Call, Sell higher-strike Call

Best When

Mild to moderate bullish view with controlled risk.

Debit spread for a moderate downside view with defined risk and reward.

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Buy higher-strike Put, Sell lower-strike Put

Best When

Mild to moderate bearish view with capped premium outlay.

Sell an OTM call spread and OTM put spread together. Profits when price stays inside the range.

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Sell OTM Call + Buy further OTM Call, Sell OTM Put + Buy further OTM Put

Best When

Range-bound market with stable or falling implied volatility.

Sell ATM straddle and buy protective wings. Higher premium than condor but narrower profit zone.

Legs

Sell ATM Call + Sell ATM Put, Buy OTM Call + Buy OTM Put

Best When

Expecting price to pin near a specific strike at expiry.

Buy ATM call and ATM put to profit from a big move in either direction.

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Buy ATM Call + Buy ATM Put (same strike, same expiry)

Best When

Pre-event volatility expansion (earnings, policy, results).

Buy OTM call and OTM put. Cheaper than a straddle but needs a larger move to profit.

Legs

Buy OTM Call + Buy OTM Put

Best When

Expecting a sharp move with uncertain direction at lower cost.

Sell an OTM call and OTM put. Profits from time decay if price stays inside the range. Unlimited risk.

Legs

Sell OTM Call + Sell OTM Put

Best When

Low and falling IV with range-bound behavior and strict risk control.

Sell an OTM call against owned stock to earn premium income. Caps upside above the strike.

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Long Stock + Sell OTM Call

Best When

Sideways to mildly bullish view on a holding you own.

Sell a put with cash reserved to buy the stock if assigned. Earn premium while waiting for a lower entry.

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Sell OTM Put (cash reserved for assignment)

Best When

Want to own the stock at a discount and pocket premium meanwhile.

Buy a put against a long stock position to cap downside while retaining upside.

Legs

Long Stock + Buy OTM/ATM Put

Best When

Holding stock through uncertain or event-heavy periods.

Hold stock, buy a protective put, finance it by selling an OTM call. Defines both upside and downside.

Legs

Long Stock + Buy OTM Put + Sell OTM Call

Best When

Want zero-cost or low-cost hedge with a defined return band.

Sell near-term option and buy longer-term option at the same strike. Profits from time decay and rising IV.

Legs

Sell Near-Expiry Option + Buy Far-Expiry Option (same strike)

Best When

Expecting price to pin near strike with IV expansion ahead.

Combines vertical and calendar — different strikes and expiries. Flexible directional and theta play.

Legs

Sell Near-Expiry OTM + Buy Far-Expiry Different Strike

Best When

Directional bias with extra theta benefit over time.

Buy one option and sell multiple at a further strike. Earns premium with directional bias and tail risk.

Legs

Buy 1 ATM Option + Sell 2 OTM Options (same expiry)

Best When

Mild directional view with stable or falling implied volatility.

Credit spread that profits when price stays above the short strike. Sell a higher-strike put and buy a lower-strike put for protection.

Legs

Sell higher-strike Put + Buy lower-strike Put

Best When

Mildly bullish view with elevated IV and theta tailwind.

Credit spread that profits when price stays below the short strike. Sell a lower-strike call and buy a higher-strike call as a hedge.

Legs

Sell lower-strike Call + Buy higher-strike Call

Best When

Mildly bearish view with elevated IV and theta tailwind.

Sell an ATM call and ATM put together. Maximum premium income with high theta but unlimited risk on both sides.

Legs

Sell ATM Call + Sell ATM Put (same strike, same expiry)

Best When

Low realized volatility with strong pinning view and strict risk control.