Options Strategies

    Explore proven options trading strategies for every market condition and experience level.

    Market Outlook:
    Difficulty:
    Risk Level:

    Showing 6 of 6 strategies

    Covered Call

    neutral
    beginner
    low risk

    Own 100 shares of stock and sell a call option against it. Generates income while providing limited upside.

    Risk & Reward

    Max Profit: Premium received + (Strike price - Stock price)
    Max Loss: Stock price decline (minus premium)
    Market Outlook: Neutral to slightly bullish

    Key Factors

    Time Decay:
    positive
    Volatility:
    benefits

    Cash-Secured Put

    bullish
    beginner
    medium risk

    Sell a put option while holding enough cash to buy 100 shares if assigned. Used to acquire stock at a discount.

    Risk & Reward

    Max Profit: Premium received
    Max Loss: Strike price - Premium received (if stock goes to zero)
    Market Outlook: Neutral to bullish

    Key Factors

    Time Decay:
    positive
    Volatility:
    benefits

    Iron Condor

    neutral
    advanced
    medium risk

    Sell an out-of-the-money call spread and put spread with same expiration. Profits from low volatility and time decay.

    Risk & Reward

    Max Profit: Net premium received
    Max Loss: Width of spread - Premium received
    Market Outlook: Neutral (range-bound)

    Key Factors

    Time Decay:
    positive
    Volatility:
    hurts

    Bull Call Spread

    bullish
    intermediate
    medium risk

    Buy a call option and sell a higher strike call with same expiration. Bullish strategy with limited risk and reward.

    Risk & Reward

    Max Profit: Difference in strikes - Net premium paid
    Max Loss: Net premium paid
    Market Outlook: Moderately bullish

    Key Factors

    Time Decay:
    negative
    Volatility:
    neutral

    Protective Put

    bullish
    beginner
    low risk

    Own 100 shares and buy a put option for downside protection. Insurance policy for stock holdings.

    Risk & Reward

    Max Profit: Unlimited (minus premium paid)
    Max Loss: Stock price - Put strike + Premium paid
    Market Outlook: Bullish with downside protection

    Key Factors

    Time Decay:
    negative
    Volatility:
    benefits

    Straddle

    volatility
    intermediate
    medium risk

    Buy a call and put with same strike and expiration. Profits from large moves in either direction.

    Risk & Reward

    Max Profit: Unlimited
    Max Loss: Total premium paid
    Market Outlook: Expecting large move (either direction)

    Key Factors

    Time Decay:
    negative
    Volatility:
    benefits