Strategies
Bear Call Spread (Credit Call Spread)
A bear call spread is a limited-risk, limited-reward strategy, consisting of one short call option.
Bear Put Spread
A bear put spread consists of buying one put and selling another put, at a lower strike, to offset part of the upfront cost.
Bear Spread Spread (Double Bear Spread, Combination Bear Spread)
This strategy is the combination of a bear call spread and a bear put spread.
Bull Call Spread (Debit Call Spread)
This strategy consists of buying one call option and selling another at a higher strike price to help pay the cost.
Bull Put Spread (Credit Put Spread)
A bull put spread is a limited-risk, limited-reward strategy, consisting of a short put option and a long put option with a lower strike.
Buying Index Calls
Goal: Positioning to profit from an increase in the level of the underlying index.
Buying Index Puts
Goal: Positioning to profit from a decrease in the level of the underlying index.
Cash-Backed Call (Cash-Secured Call)
This strategy allows an investor to purchase stock at the lower of strike price or market price during the life of the option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Collar (Protective Collar)
The investor adds a collar to an existing long stock position as a temporary, slightly less-than-complete hedge against the effects of a possible near-term decline.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Put
This strategy is used to arbitrage a put that is overvalued because of its early-exercise feature.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Double Bull Spread
This strategy is the combination of a bull call spread and a bull put spread.
Long Call
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Call Butterfly
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Call Calendar Spread (Call Horizontal)
This strategy combines a longer-term bullish outlook with a near-term neutral/bearish outlook.
Long Call Condor
This strategy profits if the underlying security is between the two short call strikes at expiration.
Long Iron Butterfly
This strategy profits if the underlying stock is outside the wings of the iron butterfly at expiration.
Long Put
This strategy consists of buying puts as a means to profit if the stock price moves lower.
Long Put Butterfly
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Put Calendar Spread (Put Horizontal)
This strategy combines a longer-term bearish outlook with a near-term neutral/bullish outlook.
Long Put Condor
This strategy profits if the underlying security is between the two short put strikes at expiration.
Long Ratio Call Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the upside potential is unlimited.
Long Ratio Put Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.
Long Stock
This strategy is simple. It consists of acquiring stock in anticipation of rising prices.
Long Straddle
This strategy consists of buying a call option and a put option with the same strike price and expiration.
Long Strangle (Long Combination)
This strategy profits if the stock price moves sharply in either direction during the life of the option.
Naked Call (Uncovered Call, Short Call)
This strategy consists of writing an uncovered call option.
Naked Put (Uncovered Put, Short Put)
A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock.
Protective Put (Married Put)
This strategy consists of adding a long put position to a long stock position.
Short Call Butterfly
This strategy profits if the underlying stock is outside the wings of the butterfly at expiration.
Short Call Calendar Spread (Short Call Time Spread)
This strategy profits from the different characteristics of near and longer-term call options.
Short Condor (Iron Condor)
This strategy profits if the underlying stock is inside the inner wings at expiration.
Short Iron Butterfly
This strategy profits if the underlying stock is inside the wings of the iron butterfly at expiration.
Short Put Butterfly
This strategy profits if the underlying stock is outside the wings of the butterfly at expiration.
Short Put Calendar Spread (Short Put Time Spread)
This strategy profits from the different characteristics of near and longer-term put options.
Short Ratio Call Spread
This strategy can profit from a steady stock price, or from a falling implied volatility.
Short Ratio Put Spread
This strategy can profit from a slightly falling stock price, or from a rising stock price.
Short Stock
A candidate for bearish investors who wish to profit from a depreciation in the stock's price.
Short Straddle
This strategy involves selling a call option and a put option with the same expiration and strike price.
Short Strangle
This strategy profits if the stock price and volatility remain steady during the life of the options.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Synthetic Long Put
This strategy combines a long call and a short stock position.
Synthetic Long Stock
This strategy is essentially a long futures position on the underlying stock.
Synthetic Short Stock
This strategy is essentially a short futures position on the underlying stock.
Bull Call Spread (Debit Call Spread)
This strategy consists of buying one call option and selling another at a higher strike price to help pay the cost.
Bull Put Spread (Credit Put Spread)
A bull put spread is a limited-risk, limited-reward strategy, consisting of a short put option and a long put option with a lower strike.
Cash-Backed Call (Cash-Secured Call)
This strategy allows an investor to purchase stock at the lower of strike price or market price during the life of the option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Collar (Protective Collar)
The investor adds a collar to an existing long stock position as a temporary, slightly less-than-complete hedge against the effects of a possible near-term decline.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Double Bull Spread
This strategy is the combination of a bull call spread and a bull put spread.
Long Call
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Ratio Call Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the upside potential is unlimited.
Long Stock
This strategy is simple. It consists of acquiring stock in anticipation of rising prices.
Naked Put (Uncovered Put, Short Put)
A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock.
Protective Put (Married Put)
This strategy consists of adding a long put position to a long stock position.
Short Ratio Put Spread
This strategy can profit from a slightly falling stock price, or from a rising stock price.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Synthetic Long Stock
This strategy is essentially a long futures position on the underlying stock.
Bear Call Spread (Credit Call Spread)
A bear call spread is a limited-risk, limited-reward strategy, consisting of one short call option.
Bear Put Spread
A bear put spread consists of buying one put and selling another put, at a lower strike, to offset part of the upfront cost.
Bear Spread Spread (Double Bear Spread, Combination Bear Spread)
This strategy is the combination of a bear call spread and a bear put spread.
Covered Put
This strategy is used to arbitrage a put that is overvalued because of its early-exercise feature.
Long Put
This strategy consists of buying puts as a means to profit if the stock price moves lower.
Long Ratio Put Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.
Naked Call (Uncovered Call, Short Call)
This strategy consists of writing an uncovered call option.
Short Ratio Call Spread
This strategy can profit from a steady stock price, or from a falling implied volatility.
Short Stock
A candidate for bearish investors who wish to profit from a depreciation in the stock's price.
Synthetic Long Put
This strategy combines a long call and a short stock position.
Synthetic Short Stock
This strategy is essentially a short futures position on the underlying stock.
Bear Call Spread (Credit Call Spread)
A bear call spread is a limited-risk, limited-reward strategy, consisting of one short call option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Put
This strategy is used to arbitrage a put that is overvalued because of its early-exercise feature.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Long Call Butterfly
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Call Calendar Spread (Call Horizontal)
This strategy combines a longer-term bullish outlook with a near-term neutral/bearish outlook.
Long Call Condor
This strategy profits if the underlying security is between the two short call strikes at expiration.
Long Put Butterfly
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Put Calendar Spread (Put Horizontal)
This strategy combines a longer-term bearish outlook with a near-term neutral/bullish outlook.
Long Put Condor
This strategy profits if the underlying security is between the two short put strikes at expiration.
Naked Call (Uncovered Call, Short Call)
This strategy consists of writing an uncovered call option.
Naked Put (Uncovered Put, Short Put)
A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock.
Short Condor (Iron Condor)
This strategy profits if the underlying stock is inside the inner wings at expiration.
Short Iron Butterfly
This strategy profits if the underlying stock is inside the wings of the iron butterfly at expiration.
Short Ratio Call Spread
This strategy can profit from a steady stock price, or from a falling implied volatility.
Short Ratio Put Spread
This strategy can profit from a slightly falling stock price, or from a rising stock price.
Short Straddle
This strategy involves selling a call option and a put option with the same expiration and strike price.
Short Strangle
This strategy profits if the stock price and volatility remain steady during the life of the options.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Collar (Protective Collar)
The investor adds a collar to an existing long stock position as a temporary, slightly less-than-complete hedge against the effects of a possible near-term decline.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Long Ratio Put Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.
Protective Put (Married Put)
This strategy consists of adding a long put position to a long stock position.
Cash-Backed Call (Cash-Secured Call)
This strategy allows an investor to purchase stock at the lower of strike price or market price during the life of the option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Long Call Calendar Spread (Call Horizontal)
This strategy combines a longer-term bullish outlook with a near-term neutral/bearish outlook.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Bear Call Spread (Credit Call Spread)
A bear call spread is a limited-risk, limited-reward strategy, consisting of one short call option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Put
This strategy is used to arbitrage a put that is overvalued because of its early-exercise feature.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Long Stock
This strategy is simple. It consists of acquiring stock in anticipation of rising prices.
Naked Call (Uncovered Call, Short Call)
This strategy consists of writing an uncovered call option.
Naked Put (Uncovered Put, Short Put)
A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock.
Short Condor (Iron Condor)
This strategy profits if the underlying stock is inside the inner wings at expiration.
Short Iron Butterfly
This strategy profits if the underlying stock is inside the wings of the iron butterfly at expiration.
Short Ratio Call Spread
This strategy can profit from a steady stock price, or from a falling implied volatility.
Short Ratio Put Spread
This strategy can profit from a slightly falling stock price, or from a rising stock price.
Short Straddle
This strategy involves selling a call option and a put option with the same expiration and strike price.
Short Strangle
This strategy profits if the stock price and volatility remain steady during the life of the options.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Bear Put Spread
A bear put spread consists of buying one put and selling another put, at a lower strike, to offset part of the upfront cost.
Bull Call Spread (Debit Call Spread)
This strategy consists of buying one call option and selling another at a higher strike price to help pay the cost.
Cash-Backed Call (Cash-Secured Call)
This strategy allows an investor to purchase stock at the lower of strike price or market price during the life of the option.
Long Call
This strategy profits if the underlying stock is at the body of the butterfly at expiration.
Long Call Calendar Spread (Call Horizontal)
This strategy combines a longer-term bullish outlook with a near-term neutral/bearish outlook.
Long Iron Butterfly
This strategy profits if the underlying stock is outside the wings of the iron butterfly at expiration.
Long Put
This strategy consists of buying puts as a means to profit if the stock price moves lower.
Long Put Calendar Spread (Put Horizontal)
This strategy combines a longer-term bearish outlook with a near-term neutral/bullish outlook.
Long Ratio Call Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the upside potential is unlimited.
Long Ratio Put Spread
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.
Long Straddle
This strategy consists of buying a call option and a put option with the same strike price and expiration.
Long Strangle (Long Combination)
This strategy profits if the stock price moves sharply in either direction during the life of the option.
Protective Put (Married Put)
This strategy consists of adding a long put position to a long stock position.
Synthetic Long Put
This strategy combines a long call and a short stock position.
Bear Call Spread (Credit Call Spread)
A bear call spread is a limited-risk, limited-reward strategy, consisting of one short call option.
Cash-Secured Put
The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned.
Covered Call (Buy/Write)
This strategy consists of writing a call that is covered by an equivalent long stock position.
Covered Put
This strategy is used to arbitrage a put that is overvalued because of its early-exercise feature.
Covered Ratio Spread
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
Covered Strangle (Covered Combination)
This strategy is appropriate for a stock considered to be fairly valued.
Long Call Condor
This strategy profits if the underlying security is between the two short call strikes at expiration.
Long Put Condor
This strategy profits if the underlying security is between the two short put strikes at expiration.
Naked Call (Uncovered Call, Short Call)
This strategy consists of writing an uncovered call option.
Naked Put (Uncovered Put, Short Put)
A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock.
Short Call Calendar Spread (Short Call Time Spread)
This strategy profits from the different characteristics of near and longer-term call options.
Short Condor (Iron Condor)
This strategy profits if the underlying stock is inside the inner wings at expiration.
Short Iron Butterfly
This strategy profits if the underlying stock is inside the wings of the iron butterfly at expiration.
Short Ratio Call Spread
This strategy can profit from a steady stock price, or from a falling implied volatility.
Short Ratio Put Spread
This strategy can profit from a slightly falling stock price, or from a rising stock price.
Short Straddle
This strategy involves selling a call option and a put option with the same expiration and strike price.
Short Strangle
This strategy profits if the stock price and volatility remain steady during the life of the options.
Stock Repair (Covered Ratio Spread)
Originally bullish and long shares, the investor is now looking to recover some or all of the original investment prior to exiting the long stock position as share prices have declined.
Long Iron Butterfly
This strategy profits if the underlying stock is outside the wings of the iron butterfly at expiration.
Long Straddle
This strategy consists of buying a call option and a put option with the same strike price and expiration.
Long Strangle (Long Combination)
This strategy profits if the stock price moves sharply in either direction during the life of the option.