Strategy reference

Options strategy guides

Fifteen common options strategies, each explained the same way: how the position is built, what it pays at expiration, the maximum gain and loss, the breakeven, and a worked example with real numbers. Every guide ends with a button that opens that exact position in the free calculator so you can change strikes, expiration, or volatility and watch the payoff diagram move.

Not sure where to start? Read Long Call and Long Put first — every other strategy on this page is built from those two pieces.

Single-leg basics

One option, one direction. Start here if the payoff diagram is new to you.

Long Call Debit · Bullish · Unlimited gain A long call is the simplest bullish options position: you pay a premium up front for the right to buy a stock at a fixed strike price before the option expires. Long Put Debit · Bearish · Capped at-zero gain A long put is the simplest bearish or hedging options position: you pay a premium up front for the right to sell a stock at a fixed strike price before the option expires.

Vertical spreads

Two options of the same type and expiration at different strikes. Defined risk, defined reward.

Bull Call Spread Debit · Bullish · Capped gain & loss A bull call spread is a two-leg bullish position with capped gain and capped loss. You pay a small net debit for upside exposure between two strikes, capped at the higher strike. Bear Call Spread Credit · Bearish · Capped gain & loss A bear call spread is a two-leg bearish position with capped gain and capped loss. You collect a credit up front; you keep it if the stock stays below the lower strike. Bull Put Spread Credit · Bullish · Capped gain & loss A bull put spread is a two-leg bullish position with capped gain and capped loss. You collect a credit up front; you keep it if the stock stays above the higher strike. Bear Put Spread Debit · Bearish · Capped gain & loss A bear put spread is a two-leg bearish position with capped gain and capped loss. You pay a small net debit for downside exposure between two strikes, capped at the lower strike.

Volatility plays

Positions that profit from a large move in either direction and lose if the stock sits still.

Long Straddle Debit · Volatility · Unlimited gain A long straddle is a two-leg position that profits from a large move in either direction. You buy both a call and a put at the same strike; your only loss case is the stock barely moving. Long Strangle Debit · Volatility · Unlimited gain A long strangle is a cheaper cousin of the long straddle: you buy a call above the stock and a put below it, paying less premium but needing a larger move to profit.

Range-bound structures

Four-leg positions that pay off when the stock stays inside a band or pins a strike.

Iron Condor Credit · Range-bound · Capped gain & loss An iron condor is a four-leg position that profits when the stock stays inside a defined range. You collect a credit by selling a put spread below the stock and a call spread above it. Iron Butterfly Credit · Pin-the-strike · Capped gain & loss An iron butterfly is a four-leg position that earns its maximum profit only if the stock pins exactly at the middle strike. Larger credit than a comparable iron condor; tighter profitable range. Long Call Butterfly Debit · Pin-the-strike · Capped gain & loss A long call butterfly is a four-leg position (across three strikes) that earns its maximum profit only if the stock pins at the middle strike. Cheap to enter; small loss if the stock moves away.

Time spreads

Different expirations on each leg. Profit comes from the faster decay of the near-term option.

Calendar Spread Debit · Time-decay · Capped loss A calendar spread (also called a horizontal spread) sells a near-term option and buys a longer-dated option of the same type and strike. Profits from the faster time-decay of the near-term short. Diagonal Spread Debit/credit · Hybrid · Variable A diagonal spread is a hybrid of a vertical spread (different strikes) and a calendar spread (different expirations). Mechanics depend on which strikes and expirations you pick.

Synthetic and directional combos

Call-and-put pairs that replicate or reshape a stock position.

Risk Reversal Credit/debit · Directional · Unlimited risk A risk reversal buys an out-of-the-money put and sells an out-of-the-money call. Standalone, it has a bearish payoff; pairing it with the underlying stock creates a "collar." Synthetic Long Stock Mixed · Directional · Unlimited gain & risk Synthetic long stock combines a long call and a short put at the same strike to replicate the payoff of owning the underlying shares — without actually buying them.
Want to price a position that isn't listed? The calculator handles any combination of up to four legs, European or American exercise, with the payoff diagram and Greeks updated as you type. Open the calculator →

These guides are educational references, not investment advice. Numbers in the worked examples are approximations for illustration only — real option prices depend on volatility, interest rates, dividends, and time to expiration. See the full disclaimer for details.