Options Strategies
Every strategy explained in plain English — setup, risk, reward, and when to use it. Filter by your market outlook and find the right trade.
Sal's Picks: Start Here
New to strategies? These 5 are the foundation. Master these first.
Long Call
The simplest bullish trade. Buy a call, profit if the stock goes up.
Covered Call
Own shares, sell calls, collect income. The most popular income strategy.
Cash-Secured Put
Get paid to buy stocks at prices you want. The other half of the wheel.
Iron Condor
Profit when the market goes nowhere. The go-to neutral strategy.
The Wheel
Systematic income — sell puts, get assigned, sell calls, repeat.
All Strategies
Long Call
Buy a call option to profit from a stock going up. Limited risk, unlimited reward.
Long Put
Buy a put option to profit from a stock going down. Limited risk, large reward potential.
Covered Call
Own 100 shares and sell a call against them to collect premium income.
Cash-Secured Put
Sell a put option backed by cash. Collect premium or buy the stock at a discount.
Protective Put
Buy a put to protect shares you own from a downturn. Insurance for your stock position.
Short Put
Sell a put option to collect premium. Profit if stock stays above the strike price.
Short Call (Naked)
Sell a call without owning shares. High risk, profit if stock stays below strike.
Covered Put
Short stock plus sell a put. The bearish mirror of a covered call.
LEAPS
Buy long-term options as a stock replacement with less capital.
Bull Call Spread
Buy a call and sell a higher call. Reduces cost, caps profit. Moderately bullish.
Bear Put Spread
Buy a put and sell a lower put. Reduces cost, caps profit. Moderately bearish.
Bull Put Spread
Sell a put and buy a lower put. Collect credit. Profit if stock stays above short strike.
Bear Call Spread
Sell a call and buy a higher call. Collect credit. Profit if stock stays below short strike.
Iron Condor
Sell a put spread and a call spread simultaneously. Profit from low volatility and range-bound markets.
Iron Butterfly
Sell a straddle and buy wings. Higher premium collected than iron condor, but narrower profit zone.
Long Straddle
Buy a call and put at the same strike. Profit from a big move in either direction.
Long Strangle
Buy an OTM call and OTM put. Cheaper than a straddle, needs a bigger move to profit.
Short Straddle
Sell a call and put at the same strike. Profit from low volatility. Undefined risk.
Short Strangle
Sell an OTM call and OTM put. Wider profit zone than short straddle. Undefined risk.
The Wheel
Cycle between selling puts and selling covered calls. A systematic income strategy.
Collar
Own shares, buy a protective put, sell a covered call. Limits both upside and downside.
Long Call Butterfly
Buy 1 call, sell 2 middle calls, buy 1 higher call. Low cost, profits if stock stays near middle strike.
Long Put Butterfly
Buy 1 put, sell 2 middle puts, buy 1 lower put. Same profile as call butterfly.
Broken Wing Butterfly (Call)
Call butterfly with unequal wings. Skewed payoff, often done for a credit.
Broken Wing Butterfly (Put)
Put butterfly with unequal wings. Skewed payoff favoring one direction.
Reverse Iron Condor
Buy a put spread and call spread. Profit from a big move in either direction.
Reverse Iron Butterfly
Buy a straddle and sell wings. Profit from a big move, limited risk.
Call Calendar Spread
Sell short-term call, buy longer-term call at same strike. Profit from time decay.
Put Calendar Spread
Sell short-term put, buy longer-term put at same strike. Time decay strategy.
Double Calendar
Two calendar spreads at different strikes. Wider profit zone than a single calendar.
Call Diagonal Spread
Buy longer-term call, sell shorter-term higher call. Combines time and direction.
Put Diagonal Spread
Buy longer-term put, sell shorter-term lower put. Bearish diagonal.
Double Diagonal
Two diagonal spreads. Wider profit range with time decay benefit.
Call Ratio Spread
Buy 1 call, sell 2 higher calls. Profits in a range, risk above short strikes.
Put Ratio Spread
Buy 1 put, sell 2 lower puts. Profits in a range, risk below short strikes.
Call Backspread
Sell 1 call, buy 2 higher calls. Profits from big upside moves.
Put Backspread
Sell 1 put, buy 2 lower puts. Profits from big downside moves.
Jade Lizard
Short put + short call spread. No upside risk if collected enough credit.
Poor Man's Covered Call
Buy a deep ITM LEAPS call, sell short-term OTM calls against it. Lower capital covered call.
Synthetic Long Stock
Buy call + sell put at same strike. Mimics owning 100 shares with less capital.
Synthetic Short Stock
Buy put + sell call at same strike. Mimics shorting 100 shares.
Poor Man's Covered Put
Deep ITM LEAPS put + sell short-term puts. Bearish income strategy.
Long Condor
Four calls at four strikes. Wider profit zone than a butterfly.
Short Call Butterfly
Sell 1 call, buy 2 middle calls, sell 1 higher call. Profit from a big move.
Short Put Butterfly
Sell 1 put, buy 2 middle puts, sell 1 lower put. Profit from a big move.
Christmas Tree (Call)
Buy 1 ATM call, sell 1 OTM call, sell 1 further OTM call. Directional ratio.
Christmas Tree (Put)
Buy 1 ATM put, sell 1 OTM put, sell 1 further OTM put. Bearish ratio.
Seagull Spread
Buy put spread + sell OTM call. Zero or low cost hedge for stock holders.
Risk Reversal
Sell OTM put + buy OTM call. Synthetic-like bullish play, often zero cost.
Conversion
Long stock + long put + short call at same strike. Arbitrage strategy.
Reversal
Short stock + short put + long call at same strike. Reverse arbitrage.
Call Ladder
Buy 1 lower call, sell 1 middle call, sell 1 higher call. Bullish ratio variant.
Put Ladder
Buy 1 higher put, sell 1 middle put, sell 1 lower put. Bearish ratio variant.
Zebra (ZEBRHA)
Buy 2 ATM calls, sell 1 ITM call. Zero extrinsic back ratio hedge.
Box Spread
Bull call spread + bear put spread at same strikes. Arbitrage/financing tool.
Gut Strangle
Buy ITM call + ITM put. More expensive than strangle, higher probability.
Strap
Buy 2 calls + 1 put at same strike. Bullish-biased volatility play.
Strip
Buy 1 call + 2 puts at same strike. Bearish-biased volatility play.
Twisted Sister (Big Lizard)
Short strangle + buy further OTM call. Jade lizard variant with extra protection.
Iron Albatross
Wide iron butterfly. Sell straddle + buy far OTM wings. More premium, more risk.
Skip Strike Butterfly
Butterfly with a gap between strikes. Directional bias with defined risk.
Unbalanced Iron Condor
Iron condor with different width put/call spreads. Directional bias.
Front Spread (Calls)
Buy 1 ITM call, sell 2+ OTM calls. Ratio variant for credit.
Front Spread (Puts)
Buy 1 ITM put, sell 2+ OTM puts. Ratio variant for credit.
Gut Iron Condor
Sell ITM straddle + buy OTM strangle. ITM version of iron condor.
Gut Straddle
Buy ITM call + ITM put at different strikes. Wider strangle variant.
Ratio Calendar
Calendar spread with unequal contracts. Extra time decay exposure.
Ratio Diagonal
Diagonal spread with unequal contracts. Directional time decay play.
Long Combo
Buy OTM call + sell OTM put. Cheaper synthetic long with less delta.
Protective Call
Short stock + buy call. Insurance for short positions.
If you're new, start with Long Call, Covered Call, and Cash-Secured Put. These three strategies cover the basics and are where most traders begin. Or take our free Beginner Course first.
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