Options Strategies Library

This library explains 12 common options strategies, each with its market outlook, max profit, max loss, breakeven, a payoff diagram and a worked example. Beginners usually start with covered calls, cash-secured puts and long calls before moving to spreads.

• neutral · beginner

  Covered Call

  A covered call means owning 100 shares and selling a call above the current price to collect premium.

• bullish · beginner

  Cash-Secured Put

  A cash-secured put sells a put below the current price while holding enough cash to buy the shares.

• neutral · intermediate

  The Wheel Strategy

  The wheel sells cash-secured puts until assigned, then sells covered calls on the shares until they're called away, and repeats.

• bullish · beginner

  Long Call

  A long call buys the right to purchase shares at the strike.

• bearish · beginner

  Long Put

  A long put buys the right to sell shares at the strike.

• bullish · intermediate

  Bull Call Spread

  A bull call spread buys a call and sells a higher-strike call in the same expiration.

• bearish · intermediate

  Bear Put Spread

  A bear put spread buys a put and sells a lower-strike put in the same expiration.

• bullish · intermediate

  Bull Put Spread

  A bull put spread sells a put and buys a lower-strike put for protection, collecting a credit.

• bearish · intermediate

  Bear Call Spread

  A bear call spread sells a call and buys a higher-strike call, collecting a credit.

• neutral · advanced

  Iron Condor

  An iron condor sells an out-of-the-money put spread and call spread in the same expiration.

• volatility · intermediate

  Long Straddle

  A long straddle buys a call and a put at the same strike and expiration.

• bullish · beginner

  Protective Put

  A protective put buys a put on shares you own to set a floor under losses.