Bull market. Bear market.
Your market.

Whether the market is roaring or snoring, you can trade in it. Based on where your position lies, you can use different combinations of calls and puts to explore different strategies—whether the market is trending up, down, or sideways.

Bullish strategies

Designed to profit when the price of the underlying security increases

Bearish strategies

Designed to profit when the price of the underlying security decreases

Neutral strategies

Designed to profit when the price of the underlying security remains stagnant or within a predetermined price range

Strong move strategies

Designed to profit when the price of the  underlying security moves significantly  up or down

A strategy for every option trader.
See what works for you.

Benefits

Total risk is limited to just the total premium paid, plus any transaction-related costs

Less money is required to control the same number of shares as compared to buying the stock outright

Risks

Can lose the entire amount of money invested in the option(s)

The extrinsic value of the position will depreciate over time—a decrease in the volatility of the underlying stock can also cause the option to lose extrinsic value

Benefits

Generates a premium for the investor

Can be used as a "cash secured put" in an account that is not approved for uncovered options selling—the amount of capital required will be a cash balance equal to the exercise cost of all short puts to initiate and maintain the position

Risks

Potential reward limited to the premium received (less transaction costs) and significant margin requirements need to be met

May need to purchase a stock at a premium to market price and carries a high exposure to risk of loss
Naked options strategies involve the highest amount of risk and are only appropriate for traders with the highest risk tolerance. Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Limits the amount of risk to just the total premium paid, plus any transaction-related costs

Reduces exposure to the impact of time decay and volatility because the investor is buying and selling calls at the same time

Risks

Limited potential for reward (difference between strike prices less what was paid)

Impact of price movements is buffered since the investor is holding long and short calls at the same time

Can entail substantial transaction costs, including multiple commissions

Benefits

Limits the amount of risk to just the difference between the strike prices, less any transaction-related costs

Reduces exposure to the impact of time decay and volatility because you are buying and selling puts at the same time

Risks

Limited potential for reward to the credit received

Can be forced out of the trade early if the short put is assigned, obligating you to purchase shares of the underlying stock at the strike price

Can entail substantial transaction costs, including multiple commissions

Benefits

Can profit if the underlying stock price moves lower

Can be used to help protect against the price of the underlying stock falling

Risks

Can lose the entire amount invested

The extrinsic value of the position will depreciate over time—a decrease in the volatility of the underlying stock can also cause the option to lose extrinsic value

Benefits

Generates a premium for the investor

Risks

Potential for reward limited to the premium (less transaction costs) and significant margin requirements have to be met

Carries unlimited risk of loss to the investor
Naked options strategies involve the highest amount of risk and are only appropriate for traders with the highest risk tolerance. Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Limits the risk to just the difference between the strike prices, less any transaction-related costs

Reduces exposure to the impact of time decay and volatility

Risks

Potential for reward limited to the credit received

Impact of price movements is buffered since you are buying and selling options at the same time

Can entail substantial transaction costs, including multiple commissions
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Limits the amount of risk to just the difference between the strike prices, less any transaction-related costs

Reduces exposure to the impact of time decay and volatility because you are buying and selling puts at the same time

Risks

Limited potential for reward to the credit received

Can be forced out of the trade early if the short put is assigned, obligating you to purchase shares of the underlying stock at the strike price

Can entail substantial transaction costs, including multiple commissions
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Designed to generate income from stock you own

Can benefit from time decay as the option gets closer to expiration

Can still receive dividend payments but may miss out on the stock dividend if your stock gets "called away" due to assignment

Risks

Potential reward is limited to the premium received (less transaction costs) and appreciation of the stock up to the strike price of the call

Requires significant capital to enter the trade

Benefits

Potentially generate income without ever owning the stock

Can benefit from time decay as the option gets closer to expiration

Risks

Obligated to buy a worthless stock at the strike price, if the stock price falls to zero

Can potentially miss out on owning a stock that keeps climbing upward

Benefits

Limits the amount of risk to just the total premium paid

Increases in volatility and time decay can improve the trade's overall performance

Risks

A decrease in volatility will negatively impact the trade's performance

Requires more frequent monitoring, due to the possibility of an assignment

Can entail substantial transaction costs, including multiple commissions
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Limits the amount of risk to just the total premium paid

Increases in volatility and time decay can improve the trade's overall performance

Risks

A decrease in volatility will negatively impact the trade's performance

Requires more frequent monitoring, due to the possibility of an assignment

Can entail substantial transaction costs, including multiple commissions
Short options can be assigned at any time up to expiration regardless of the in-the-money amount.

Benefits

Time decay of both the short call and put can improve the trade's overall performance

Decrease in volatility during the trade can also improve the trade's overall performance

Risks

If the stock price moves up or below the break-even points, the trade carries nearly unlimited risk

Increase in volatility during the trade will negatively impact the trade's performance

Can entail substantial transaction costs, including multiple commissions
Naked options strategies involve the highest amount of risk and are only appropriate for traders with the highest risk tolerance. Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Time decay of both the short call and put can improve the trade's overall performance

Decrease in volatility during the trade can also improve the trade's overall performance

Risks

If the stock moves above or below the break-even points, the trade carries relatively unlimited risk

Increase in volatility during the trade will negatively impact the trade's performance
Naked options strategies involve the highest amount of risk and are only appropriate for traders with the highest risk tolerance. Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

The total risk of the trade is limited to the total cost of the trade

Can profit from stock movement in either direction, as long as it moves outside the risk range and offers improved break-even points

Risks

Carries additional transaction costs and may entail multiple commissions since it is a four‑legged trade

The difference in the bid-ask spread is amplified and impacts the overall trade performance
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Can be utilized to help protect any gains if the investor already has appreciation of the stock

Can hold the stock during a certain period of uncertainty with limited amount of exposure

Risks

Limited gain potential if stock price moves above the strike price of the call

Requires a larger amount of capital (due to the purchase of the stock) to enter the trade as compared to a spread

Can entail substantial transaction costs, including multiple commissions
The collar strategy involves the risks of both covered calls and protective puts.

Benefits

The total risk of the trade is limited to the total cost of the trade

Can profit when there is little to no stock price movement

Risks

Carries additional transaction costs and may entail multiple commissions since it is a four‑legged trade

The difference in the bid-ask spread is amplified and impacts the overall trade performance
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

The total risk of the trade is limited to the total cost of the trade

Can profit when there is little to no stock price movement

Risks

Carries additional transaction costs and may entail multiple commissions since it is a four-legged trade

Limited potential profit
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

Can profit from both directions of significant stock movement

Limited risk to just the total cost of the trade

Increase in volatility can improve the trade's overall performance

Risks

Time decay will amplify a negative outcome of the trade, since both calls and puts are being purchased

A decrease in volatility will negatively impact the trade's performance

The trade's positive performance will require a significant movement of the stock price

Can entail substantial transaction costs, including multiple commissions
Should the underlying stock not move up or down by more than the cost of both the call and the put, plus transaction costs, the investor can lose the entire cost of the trade.

Benefits

Can profit from both directions of a significant stock movement

Limited risk to just the total cost of the trade

Increase in volatility can improve the trade's overall performance

Risks

Time decay will amplify a negative outcome of the trade since both calls and puts are being purchased

A decrease in volatility will negatively impact the trade's performance

The trade's positive performance will require a significant movement of the stock price

Can entail substantial transaction costs, including multiple commissions
Should the underlying stock not move up or down by more than the cost of both the call and the put, plus transaction costs, the investor can lose the entire cost of the trade.

Benefits

The total risk of the trade is limited to the total cost of the trade

Can profit from stock movement in either direction, as long as it moves outside the range

Risks

Carries additional transaction costs and may entail multiple commissions since it is a four-legged trade

The difference in the bid-ask spread is amplified and impacts the trade’s overall performance
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

Benefits

The total risk of the trade is limited to the total cost of the trade

Can profit from stock movement in either direction, as long as it moves outside the range

Risks

Carries additional transaction costs and may entail multiple commissions since it is a four-legged trade

The difference in the bid-ask spread is amplified and impacts the trade’s overall performance
Short options can be assigned at any time up to expiration regardless of the in‑the‑money amount.

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