Every options strategy is a bet on some combination of direction, size of move and time. Reading a strategy means working out which of those it is.
- Covered call
- Hold the coin and sell a call. You collect premium and give up gains above the strike. A bet that the price stays below it.
- Cash-secured put
- Sell a put with the cash to buy at the strike. You're paid to offer to buy lower.
- Vertical spread
- Buy one option and sell another at a different strike. It caps both gain and loss and reduces the premium.
- Straddle or strangle
- Buy a call and a put together. A bet on a big move, in either direction.
A straddle's shape
A straddle loses most if the price finishes right at the strike and gains the further it moves. It's a bet on volatility. Which is why a straddle is expensive when IV is already high: you pay for the move in advance, and you need more than was priced in to profit.
Compare on the same terms
The fair comparison for any strategy isn't "what can it make" but "what do you have to believe, and how much are you paying to be right". Our tools let you see all of that on real prices, and replay it on past markets.