Options Strategies Guide
Learn about the strategies available on Opzun. Click any strategy on the main page to build it instantly with real market data.
Iron Condor
Sell OTM Put + Buy further OTM Put + Sell OTM Call + Buy further OTM Call
Neutral — expecting the underlying to stay within a range
Net credit received
Width of wider spread minus net credit
Low volatility, range-bound markets, collecting premium
A big move in either direction beyond the short strikes
Iron Butterfly
Sell ATM Put + Sell ATM Call + Buy OTM Put + Buy OTM Call
Very neutral — expecting minimal movement, pinning at the short strike
Net credit received (higher than iron condor)
Width of spread minus net credit
Very low volatility, expecting a pin at a specific price
Any significant move away from the short strike
Bull Call Spread
Buy ATM Call + Sell OTM Call
Moderately bullish — expecting the underlying to rise to a target
Width of strikes minus net debit
Net debit paid
Bullish with defined risk, lower cost than a naked call
Underlying stays below the long strike
Bear Put Spread
Buy ATM Put + Sell OTM Put
Moderately bearish — expecting the underlying to fall to a target
Width of strikes minus net debit
Net debit paid
Bearish with defined risk, lower cost than a naked put
Underlying stays above the long strike
Short Straddle
Sell ATM Call + Sell ATM Put (same strike)
Very neutral — expecting the underlying to stay near current price
Total premium received
Unlimited (theoretically)
High IV environments where you expect IV to collapse
A large move in either direction; unlimited loss potential
Short Strangle
Sell OTM Call + Sell OTM Put (different strikes)
Neutral — wider range than a straddle
Total premium received
Unlimited (theoretically)
High IV, expecting the underlying to stay in a broad range
A large move beyond either short strike; unlimited loss potential
Long Call
Buy Call
Bullish — expecting significant upside
Unlimited
Premium paid
Strong directional conviction with defined risk
Time decay (theta) works against you every day
Long Put
Buy Put
Bearish — expecting significant downside, or hedging a long position
Strike price minus premium (underlying goes to zero)
Premium paid
Downside protection, bearish conviction
Time decay (theta) works against you every day
Bear Call Spread
Sell ATM Call + Buy OTM Call
Moderately bearish — expecting the underlying to stay below the short strike
Net credit received
Width of strikes minus net credit
Bearish with defined risk, collecting premium on the way down
Underlying rallies above the short call strike
Bull Put Spread
Sell ATM Put + Buy OTM Put
Moderately bullish — expecting the underlying to stay above the short strike
Net credit received
Width of strikes minus net credit
Bullish with defined risk, popular income strategy
Underlying drops below the short put strike
Butterfly
Buy 1 lower Call + Sell 2 ATM Calls + Buy 1 higher Call
Neutral — expecting the underlying to pin at the center strike
Width of spread minus net debit (at center strike)
Net debit paid
Low-cost neutral bet with high reward if price pins, cheaper than iron butterfly
Any significant move away from center strike
Jade Lizard
Sell OTM Put + Sell OTM Call + Buy further OTM Call
Neutral to slightly bullish — no upside risk if credit exceeds call spread width
Total credit received
On the downside: put strike minus credit. No risk on upside if structured correctly
Premium sellers who want to eliminate upside risk entirely
Large downside move below the short put
Long Straddle
Buy ATM Call + Buy ATM Put (same strike)
Expecting a big move in either direction — earnings, events, breakouts
Unlimited (on either side)
Total premium paid for both options
Pre-earnings plays, expected volatility events, breakout setups
Underlying stays flat — both options decay and expire worthless
Long Strangle
Buy OTM Call + Buy OTM Put (different strikes)
Expecting a big move — cheaper than a straddle but needs a larger move to profit
Unlimited (on either side)
Total premium paid for both options
Cheaper alternative to straddle when expecting high volatility
Underlying stays in a range — both options expire worthless
Short Call
Sell Call (naked or covered)
Bearish to neutral — expecting the underlying to stay below the strike
Premium received
Unlimited (if naked)
Income generation, covered call writing against existing shares
Unlimited loss if underlying rallies significantly (naked). Must own shares for covered call
Short Put
Sell Put (cash-secured)
Bullish to neutral — willing to buy the underlying at the strike price
Premium received
Strike price minus premium (underlying goes to zero)
Income generation, getting paid to wait for a lower entry price
Underlying drops significantly — you are assigned shares at a loss
Educational purposes only
This guide is for educational purposes. Options trading involves substantial risk of loss. Consult a financial advisor before trading.