Strategy library

Options strategies, explained.

Eighteen strategies, from your first long call to iron condors and calendars. Each page shows the payoff on a simple $100 stock, the most you can make and lose, the break-even, and how traders manage it.

Bullish

Long callPay a premium for the right to buy 100 shares at the strike. Profits if the stock rises enough, fast enough.Defined risk · Low IV Cash-secured putSell a put with cash set aside to buy the shares. You are paid to agree to buy the stock at a lower price.Defined risk · High IV Protective putOwn the shares and buy a put underneath them: insurance that sets a floor on your loss.Defined risk · Low IV Bull call spreadBuy a call and sell a higher call. Cheaper than a call on its own, with profit capped at the higher strike.Defined risk · Any IV Bull put spreadSell a put and buy a lower put. You collect a credit and keep it if the stock stays above the short strike.Defined risk · High IV Poor man's covered callBuy a deep in-the-money long-dated call instead of the shares, then sell short-term calls against it.Defined risk · Any IV

Bearish

Long putPay a premium for the right to sell 100 shares at the strike. Profits if the stock falls enough before expiry.Defined risk · Low IV Bear put spreadBuy a put and sell a lower put. A cheaper bearish trade with profit capped at the lower strike.Defined risk · Any IV Bear call spreadSell a call and buy a higher call. You keep the credit if the stock stays below the short strike.Defined risk · High IV

Neutral

Covered callOwn 100 shares and sell a call against them. You collect premium now and agree to sell the shares at the strike.Undefined risk · High IV CollarOwn the shares, buy a put below and sell a call above. The call pays for the insurance; you give up upside past the call.Defined risk · Any IV Iron condorA bull put spread plus a bear call spread. You profit if the stock stays between the two short strikes.Defined risk · High IV Iron butterflySell an at-the-money straddle and buy wings to cap the risk. Bigger credit than a condor, narrower profit zone.Defined risk · High IV Short strangleSell an out-of-the-money call and put. High probability of profit, but losses are unlimited on the call side.Undefined risk · High IV Call butterflyBuy one call below, sell two at the target, buy one above. A cheap bet that the stock ends near a specific price.Defined risk · Any IV Call calendarSell a near-term call and buy a later call at the same strike. Profits from the front option decaying faster.Defined risk · Low IV

Big move either way

Long straddleBuy a call and a put at the same strike. Profits from a big move in either direction.Defined risk · Low IV Long strangleBuy an out-of-the-money call and an out-of-the-money put. Cheaper than a straddle, needs a bigger move.Defined risk · Low IV

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Options Trading Simulator is for education and practice only. Nothing in the app or on this site is investment, financial or tax advice. Options involve risk and are not suitable for every investor. Examples use a simulated $100 stock and are not live quotes.