Implied Volatility Decrease

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.