Options strategies
Combining calls and puts lets you build positions with defined risk and profit not only from direction, but also from volatility and time decay. Use the Options Calculator to see the greeks and payoff diagram of each one.
By the TradingCalculator.Pro team · Updated on · About us
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Covered call
Sell a call against stock you already own to collect the premium. Generates income in a flat or mildly bullish market, in exchange for capping your gain if it rallies hard.
Cash-secured put
Sell a put with cash set aside to buy the stock if it drops. You collect the premium and, if assigned, buy at a lower price than you wanted. Bullish/neutral.
Bull call spread
Buy a call and sell a higher-strike call. Both risk and reward are capped; cheaper than buying the call alone. For moderate upside.
Bear put spread
Buy a put and sell a lower-strike put. Reward and risk are capped; a cheap way to position for downside. For moderate declines.
Iron condor
Sell an out-of-the-money call spread and put spread at the same time. You win if price stays inside a range; defined risk. A range/income strategy.
Straddle / strangle
Buy a call and a put at the SAME strike to bet on a BIG move in either direction (e.g. before earnings). You profit from volatility; you lose if price doesn't move. (different strikes make it a strangle: cheaper, but it needs a bigger move).
Protective put
Buy a put on stock you hold, like insurance: it caps your loss if it falls, in exchange for the premium cost. A hedge for a long position.