Options Strategy Cheat Sheet
Covered Call Neutral to bullish
Setup: Own 100 shares + sell 1 call
Why: Earn income on shares you own; you cap your upside.
Max profit: Limited: (strike − stock cost) + premium
Max loss: Large: stock can fall to $0 (cushioned by premium)
IV: Better when IV is high · Level: Beginner
Cash-Secured Put Neutral to bullish
Setup: Sell 1 put, hold cash for 100 shares
Why: Get paid to wait to buy a stock at a lower price.
Max profit: Limited: the premium
Max loss: Large: strike − premium if stock goes to $0
IV: Better when IV is high · Level: Beginner
Long Call Bullish
Setup: Buy 1 call
Why: Bet on a rise with risk limited to what you pay.
Max profit: Unlimited
Max loss: Premium paid
IV: Better when IV is low · Level: Beginner
Long Put Bearish
Setup: Buy 1 put
Why: Bet on a drop with risk limited to what you pay.
Max profit: Large: strike − premium (stock to $0)
Max loss: Premium paid
IV: Better when IV is low · Level: Beginner
Protective Put Bullish
Setup: Own 100 shares + buy 1 put
Why: Insurance on shares you own.
Max profit: Unlimited (minus put cost)
Max loss: Stock cost − put strike + premium
IV: Better when IV is low · Level: Beginner
Collar Neutral to bullish
Setup: Own shares + buy put + sell call
Why: Low-cost protection that also caps upside.
Max profit: Limited: up to the call strike
Max loss: Limited: down to the put strike
IV: Works in most IV · Level: Intermediate
Bull Call Spread Bullish
Setup: Buy lower call + sell higher call
Why: A cheaper bullish bet with a profit cap.
Max profit: Strike width − debit
Max loss: Net debit
IV: Better when IV is low · Level: Intermediate
Bear Put Spread Bearish
Setup: Buy higher put + sell lower put
Why: A cheaper bearish bet with a profit cap.
Max profit: Strike width − debit
Max loss: Net debit
IV: Better when IV is low · Level: Intermediate
Bull Put Credit Spread Neutral to bullish
Setup: Sell higher put + buy lower put
Why: Collect a credit if the stock stays above the short put.
Max profit: Net credit
Max loss: Strike width − credit
IV: Better when IV is high · Level: Intermediate
Bear Call Credit Spread Neutral to bearish
Setup: Sell lower call + buy higher call
Why: Collect a credit if the stock stays below the short call.
Max profit: Net credit
Max loss: Strike width − credit
IV: Better when IV is high · Level: Intermediate
Iron Condor Neutral (range)
Setup: Bull put spread + bear call spread
Why: Profit if the stock stays inside a range.
Max profit: Net credit
Max loss: Wider spread width − credit
IV: Better when IV is high · Level: Advanced
Long Call Butterfly Neutral (range)
Setup: Buy 1 low call, sell 2 middle, buy 1 high
Why: Cheap bet that the stock pins a target price.
Max profit: Middle − lower strike − debit
Max loss: Net debit
IV: Better when IV is high · Level: Advanced
Calendar Spread Neutral (range)
Setup: Sell near-term call + buy later call, same strike
Why: Profit from faster time decay on the short-dated option.
Max profit: Varies; best near the strike at the first expiration
Max loss: Net debit (roughly)
IV: Better when IV is low · Level: Advanced
Poor Man's Covered Call Neutral to bullish
Setup: Buy deep ITM LEAPS call + sell short-term OTM call
Why: Covered-call-style income with far less capital.
Max profit: Limited while the short call is open
Max loss: Net debit
IV: Works in most IV · Level: Advanced
Long Straddle Big move, either way
Setup: Buy call + buy put, same strike
Why: Profit from a big move in either direction.
Max profit: Unlimited
Max loss: Net debit
IV: Better when IV is low · Level: Intermediate
Long Strangle Big move, either way
Setup: Buy OTM call + buy OTM put
Why: Cheaper big-move bet; needs an even bigger move.
Max profit: Unlimited
Max loss: Net debit
IV: Better when IV is low · Level: Intermediate
The Greeks in one line each
Delta: how much the option moves per $1 move in the stock.
Gamma: how fast delta changes.
Theta: value lost per day from time decay.
Vega: value change per 1% change in IV.
Key terms
Call: right to buy at the strike. Put: right to sell at the strike. ITM/OTM: in or out of the money. Debit: you pay. Credit: you collect. 1 contract = 100 shares.
marketwrench.com · Educational only, not investment advice. Options involve risk and are not suitable for all investors. Max profit and loss assume holding to expiration and ignore commissions and early assignment.