Reference Guide
Options Strategy Playbook
A comprehensive reference for options trading strategies — from simple single-leg trades to advanced multi-leg spreads. Each strategy includes setup instructions, payoff diagrams, risk profiles, and practical tips from experienced traders.
4
Bullish Strategies
3
Bearish Strategies
5
Neutral Strategies
2
Volatile Strategies
Long Call
Buy a call option to profit from a rise in the underlying stock. This is the simplest bullish options strategy with unlimited upside potential and limited downside risk.
Bull Call Spread
A debit spread that profits from a moderate rise in the stock price. By selling a higher-strike call against your long call, you reduce cost and cap your risk — but also cap your upside.
Cash-Secured Put
Sell a put option while holding enough cash to buy the stock if assigned. This strategy generates income while giving you a chance to buy a stock you like at a lower price.
Covered Call
Own 100 shares of a stock and sell a call option against them. This generates income from the premium while you hold the stock, in exchange for capping your upside at the strike price.
Long Put
Buy a put option to profit from a decline in the underlying stock. This is the simplest bearish strategy with large profit potential and limited downside risk.
Bear Put Spread
A debit spread that profits from a moderate decline in the stock price. You buy a higher-strike put and sell a lower-strike put to reduce cost. Risk and reward are both capped.
Bear Call Spread
A credit spread that profits when the stock stays below the short call strike. You sell a lower-strike call and buy a higher-strike call for protection, collecting a net credit.
Iron Condor
Sell an out-of-the-money call spread and an out-of-the-money put spread simultaneously. You profit if the stock stays within a range. This is one of the most popular income-generating strategies.
Iron Butterfly
Sell an ATM call and an ATM put at the same strike, then buy an OTM call and OTM put for protection. Similar to an iron condor but with the short strikes at the same price, producing more premium and a narrower profit zone.
Short Straddle
Sell an ATM call and an ATM put at the same strike price and expiration. You collect maximum premium and profit if the stock stays near the strike. This is a high-premium, high-risk strategy.
Short Strangle
Sell an OTM call and an OTM put at different strike prices. Similar to the short straddle but with a wider profit range and lower premium collected. Still an undefined-risk strategy.
Calendar Spread
Sell a near-term option and buy a longer-term option at the same strike price. Profits from the faster time decay of the short-dated option. Also called a horizontal spread or time spread.
Long Straddle
Buy an ATM call and an ATM put at the same strike price and expiration. You profit from a large move in either direction. The cost is high because you are buying two options.
Long Strangle
Buy an OTM call and an OTM put at different strike prices. Cheaper than a straddle because both options are out of the money, but requires an even larger stock move to profit.
Understanding Options Strategies
Options strategies are structured trade setups that combine one or more options contracts to create a specific risk/reward profile. Instead of simply buying a stock and hoping it goes up, options strategies allow you to profit from a stock going up, going down, staying flat, or making a big move in either direction.
The key to choosing the right strategy is matching it to your market outlook, risk tolerance, and the current implied volatility environment. Bullish strategies profit when the stock rises. Bearish strategies profit when it falls. Neutral strategies profit when the stock stays in a range. And volatile strategies profit from large moves in either direction.
Each strategy in this playbook includes the trade setup, maximum profit and loss, breakeven calculation, ideal conditions for use, and practical tips from experienced traders. Use the filters above to find strategies that match your market outlook and experience level.
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