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Option                     Example                Bull / Bear             Max Gain                             Max Loss                              Breakeven



     buy calls           buy 1 xyz Oct. 50 call @ 3        bull                  unlimited                            premium                            strike + premium


      buy puts           buy 1 xyz Oct. 40 put @ 2         bear           strike minus premium                        premium                            strike - premium


                        sell 1 abc Jan. 50 call @ 4,
sell uncovered calls                                       bear                  premium                              unlimited                          strike + premium
                              & do not own abc

                        sell 1 abc Jan. 50 call @ 2,
 sell covered calls                                        bear       strike + prem.- cost of strike               cost - premium                         cost - premium
                          & own 100 shares abc

                         sell 1 xyz Feb. 35 put @ 3,
sell uncovered puts                                        bull                  premium                          strike - premium                       strike - premium
                            & not short xyz stock

                         sell 1 xyz Feb. 35 put @ 3,
 sell covered puts                                         bull            SS + prem. - strike                        unlimited                           SS + premium
                           & short 100 shares xyz


                        buy 1 abc Oct. 50 call @ 5,
 call credit spread                                        bear                  net credit                   diff in strike - net credit              lower strike + credit
                        sell 1 abc Oct. 40 call @ 8

                         buy 1 abc Jan 50 call @ 8,
 call debit spread                                         bull          diff in strike - net debit                   net debit                         lower strike + debit
                         sell 1 abc Jan 40 call @ 5

                        buy 1 abc Nov. 40 put @ 8,
  put debit spread                                         bear          diff in strike - net debit                   net debit                      higher strike - net debit
                        sell 1 abc Nov. 50 put @ 5

                        buy 1 axy Dec. 40 put @ 5,
 put credit spread                                         bull                  net credit                   diff in strike - net debit             higher strike - net credit
                        sell 1 axy Dec. 50 put @ 8


                        buy 1 xyz Oct. 130 call @ 8,
   buy straddle                                          volatility   call unlimited, put strike - prem.              premium                   call strike + prem., put strike - prem.
                         buy 1 xyz Oct.130 put @ 6

                        sell 1 xyz Oct. 130 call @ 5,
    sell straddle                                           flat                 premium                   call unlimited, put strike - prem.   call strike + prem., put strike - prem.
                        sell 1 xyz Oct. 120 put @ 7


                         buy 100 shares xyz @ 80
protective put buyer    buy 1 xyz July 80 put @ 2.50      hedge                  unlimited                      cost + prem. - strike               cost + prem. (cost basis)
                             (at the same time)
                         SS 100 shares xyz @ 80
protective call buyer    buy 1 xyz July 80 call @ 3       hedge             short sale - prem.              strike + prem. - short sale             cost - prem. (cost basis)
                            (at the same time)

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Options Strategy Chart

  • 1. Option Example Bull / Bear Max Gain Max Loss Breakeven buy calls buy 1 xyz Oct. 50 call @ 3 bull unlimited premium strike + premium buy puts buy 1 xyz Oct. 40 put @ 2 bear strike minus premium premium strike - premium sell 1 abc Jan. 50 call @ 4, sell uncovered calls bear premium unlimited strike + premium & do not own abc sell 1 abc Jan. 50 call @ 2, sell covered calls bear strike + prem.- cost of strike cost - premium cost - premium & own 100 shares abc sell 1 xyz Feb. 35 put @ 3, sell uncovered puts bull premium strike - premium strike - premium & not short xyz stock sell 1 xyz Feb. 35 put @ 3, sell covered puts bull SS + prem. - strike unlimited SS + premium & short 100 shares xyz buy 1 abc Oct. 50 call @ 5, call credit spread bear net credit diff in strike - net credit lower strike + credit sell 1 abc Oct. 40 call @ 8 buy 1 abc Jan 50 call @ 8, call debit spread bull diff in strike - net debit net debit lower strike + debit sell 1 abc Jan 40 call @ 5 buy 1 abc Nov. 40 put @ 8, put debit spread bear diff in strike - net debit net debit higher strike - net debit sell 1 abc Nov. 50 put @ 5 buy 1 axy Dec. 40 put @ 5, put credit spread bull net credit diff in strike - net debit higher strike - net credit sell 1 axy Dec. 50 put @ 8 buy 1 xyz Oct. 130 call @ 8, buy straddle volatility call unlimited, put strike - prem. premium call strike + prem., put strike - prem. buy 1 xyz Oct.130 put @ 6 sell 1 xyz Oct. 130 call @ 5, sell straddle flat premium call unlimited, put strike - prem. call strike + prem., put strike - prem. sell 1 xyz Oct. 120 put @ 7 buy 100 shares xyz @ 80 protective put buyer buy 1 xyz July 80 put @ 2.50 hedge unlimited cost + prem. - strike cost + prem. (cost basis) (at the same time) SS 100 shares xyz @ 80 protective call buyer buy 1 xyz July 80 call @ 3 hedge short sale - prem. strike + prem. - short sale cost - prem. (cost basis) (at the same time)