Options Trading Strategies
From single leg to multi-leg strategies
Single Leg Strategies
Long Call
BullishBuy a call option to profit from stock rising.
Breakeven:Strike + Premium
Max Loss:Premium
Max Gain:Unlimited
Long Put
BearishBuy a put option to profit from stock falling.
Breakeven:Strike - Premium
Max Loss:Premium
Max Gain:Strike - Premium
Short Call
Bearish/NeutralSell a call option to collect premium.
Breakeven:Strike + Premium
Max Loss:Unlimited
Max Gain:Premium
Short Put
Bullish/NeutralSell a put option to collect premium.
Breakeven:Strike - Premium
Max Loss:Strike - Premium
Max Gain:Premium
2 Leg Strategies
Bull Call Spread (Call Debit)
BullishBuy lower strike call, sell higher strike call. Limited risk bullish play.
Breakeven:Long + Net Debit
Max Loss:Net Debit
Max Gain:Width - Debit
Bear Call Spread (Call Credit)
BearishSell lower strike call, buy higher strike call. Collect premium with protection.
Breakeven:Short + Net Credit
Max Loss:Width - Credit
Max Gain:Net Credit
Bear Put Spread (Put Debit)
BearishBuy higher strike put, sell lower strike put. Limited risk bearish play.
Breakeven:Long - Net Debit
Max Loss:Net Debit
Max Gain:Width - Debit
Bull Put Spread (Put Credit)
BullishSell higher strike put, buy lower strike put. Collect premium with protection.
Breakeven:Short - Net Credit
Max Loss:Width - Credit
Max Gain:Net Credit
Long Straddle
VolatilityBuy call AND put at same strike. Profit from large moves either direction.
Breakeven:Strike +/- Total
Max Loss:Total Premium
Max Gain:Unlimited
Long Strangle
VolatilityBuy OTM call AND OTM put. Cheaper than straddle, needs bigger move.
Breakeven:Strikes +/- Total
Max Loss:Total Premium
Max Gain:Unlimited