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PayoffPlot

Strategies

Guides for 41 options strategies — the payoff diagram, max profit and loss, breakevens, a worked example and FAQs. Open any of them in Build to price it on a live chain.

New to options? Start here

5 guides, each building on the last

  1. 1Long callProfit if a stock rises, risking only what you pay.
  2. 2Covered callEarn income from shares you already own.
  3. 3Cash-secured putGet paid while you wait to buy a stock.
  4. 4Bull call spreadA cheaper bet on a rise, with a capped cost.
  5. 5Iron condorProfit when a stock stays in a range.

Most searched

Covered callCash-secured putIron condorBull put spread

Single-Leg Options

4

Long Call

BullishDefined riskBeginner

Buy a call option to profit from a bullish move with limited risk.

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Long Put

BearishDefined riskBeginner

Buy a put option to profit from a bearish move with limited risk.

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Short Call (Naked Call)

BearishUndefined riskAdvanced

Sell a call option to collect premium, with unlimited risk.

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Short Put (Naked Put)

BullishUndefined riskIntermediate

Sell a put option to collect premium with large downside risk.

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Stock + Option

5

Covered Call

NeutralStock-level riskBeginner

Sell calls against stock you own to generate income and reduce cost basis.

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Covered Put

BearishUndefined riskAdvanced

Sell puts while short the underlying stock.

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Cash-Secured Put

BullishDefined riskBeginner

Sell puts with cash reserved to buy stock, collecting premium while waiting.

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Protective Put

BullishDefined riskBeginner

Buy a put against long stock to create a floor under the position.

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Collar

NeutralDefined riskBeginner

Protect stock with a bought put while financing it by selling a covered call. Caps both risk and reward.

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Vertical Spreads

4

Bull Call Spread

BullishDefined riskBeginner

Buy a lower-strike call and sell a higher-strike call for a bullish position with defined risk.

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Bear Call Spread

BearishDefined riskIntermediate

Sell a lower-strike call and buy a higher-strike call for a bearish credit spread.

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Bull Put Spread

BullishDefined riskIntermediate

Sell a higher-strike put and buy a lower-strike put for a bullish credit spread.

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Bear Put Spread

BearishDefined riskBeginner

Buy a higher-strike put and sell a lower-strike put for a bearish position with defined risk.

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Volatility

7

Long Straddle

VolatileDefined riskIntermediate

Buy a call and put at the same strike to profit from a large move in either direction.

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Short Straddle

NeutralUndefined riskAdvanced

Sell a call and put at the same strike to profit from low volatility.

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Long Strangle

VolatileDefined riskIntermediate

Buy an OTM call and OTM put to profit from a large move in either direction, cheaper than a straddle.

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Short Strangle

NeutralUndefined riskAdvanced

Sell an OTM call and OTM put to profit from low volatility with a wider profit range than a straddle.

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Guts

VolatileDefined riskAdvanced

Buy an ITM call and ITM put to create a higher-cost strangle with intrinsic value on both legs.

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Strip

VolatileDefined riskAdvanced

Buy one call and two puts at the same strike for a volatility trade with bearish bias.

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Strap

VolatileDefined riskAdvanced

Buy two calls and one put at the same strike for a volatility trade with bullish bias.

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Iron Condors & Butterflies

2

Iron Condor

NeutralDefined riskIntermediate

Sell a call spread and a put spread to profit from low volatility with defined risk.

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Iron Butterfly

NeutralDefined riskIntermediate

Sell an ATM straddle and buy OTM wings for a neutral strategy with higher credit than iron condor.

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Butterflies & Ratios

6

Broken Wing Butterfly

NeutralDefined riskAdvanced

Buy one option, sell two middle options, and buy a farther wing to skew risk and reward.

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Unbalanced Butterfly

NeutralDefined riskAdvanced

A butterfly-style spread with unequal contract quantities to tilt the payoff profile.

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Ratio Call Spread

BullishUndefined riskAdvanced

Buy one call and sell multiple higher-strike calls for a bullish trade with upside risk.

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Ratio Put Spread

BearishUndefined riskAdvanced

Buy one put and sell multiple lower-strike puts for a bearish trade with downside risk.

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Backratio Call Spread

BullishDefined riskAdvanced

Sell one call and buy multiple higher-strike calls to create convex bullish upside.

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Backratio Put Spread

BearishDefined riskAdvanced

Sell one put and buy multiple lower-strike puts to create convex bearish downside.

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Time & Diagonal

6

Diagonal Spread

BullishDefined riskIntermediate

Buy a longer-dated option and sell a shorter-dated option at a different strike.

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Double Calendar

NeutralDefined riskAdvanced

Sell near-term call and put options while buying longer-dated options at matching strikes.

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Double Diagonal

NeutralDefined riskAdvanced

Combine bullish and bearish diagonals by selling near-term OTM options and buying farther-dated wings.

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Poor Man's Covered Call (PMCC)

BullishDefined riskIntermediate

Buy a deep ITM LEAPS call and sell short-term OTM calls against it. Lower capital than a covered call.

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Poor Man's Covered Put

BearishDefined riskAdvanced

Buy a deep ITM put and sell shorter-term OTM puts against it for bearish income exposure.

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Calendar Spread

NeutralDefined riskIntermediate

Buy a longer-dated option and sell a shorter-dated option at the same strike to profit from time decay.

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Synthetic

4

Synthetic Long Stock

BullishUndefined riskAdvanced

Buy a call and sell a put at the same strike to mimic long stock exposure.

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Synthetic Short Stock

BearishUndefined riskAdvanced

Sell a call and buy a put at the same strike to mimic short stock exposure.

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Synthetic Covered Call

BullishUndefined riskIntermediate

Sell a put to create a payoff similar to a covered call without buying shares upfront.

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Risk Reversal

BullishUndefined riskAdvanced

Buy an OTM call and sell an OTM put for leveraged bullish exposure, or invert the legs for bearish exposure.

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Income & Credit

3

Jade Lizard

NeutralUndefined riskAdvanced

Sell an OTM put and an OTM call spread to collect credit with no upside risk when the credit exceeds call spread width.

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Big Lizard

NeutralUndefined riskAdvanced

A Jade Lizard with both short strikes at the money: a short straddle plus a long OTM call, for a much larger credit.

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Reverse Jade Lizard

NeutralUndefined riskAdvanced

Sell an OTM call and an OTM put spread to create a bearish-to-neutral credit strategy.

Read the guideOpen in Build