Here are some popular types of Options Trades

A review of a few Options trades that are crucial to investors especially at the beginning stage.

Market Standpoint

Risk

Description

Reward

I'm a paragraph. Click here to add your own text and edit me. It's easy.

Fairly bearish

Restricted to the net premium paid

Purchasing a put option and selling a different put option at a lower price.

Restricted to the difference in strike prices subtracted by the premium. Read more

I'm a paragraph. Click here to add your own text and edit me. It's easy.

Fairly bullish

Restricted to the net premium paid

Purchasing a call option and selling a different call option at a higher strike price

Restricted to the difference in strike prices subtracted by the net premium paid.

I'm a paragraph. Click here to add your own text and edit me. It's easy.

Neutral

Restricted to the net premium paid.

Combining bull and bear spreads with three strike prices, creating a position with limited risk/reward.

Restricted to the difference between middle and outer strike prices subtracted from the premium.

I'm a paragraph. Click here to add your own text and edit me. It's easy.

Covered Call

Neutral to moderately bullish

Restricted to the premium received.

Selling a call option while owning the underlying stock.

Restricted to the stock going up the strike price.

Iron Condor

Neutral

Restricted to net premium received

Selling a bull put spread and a bear call spread with distinct strike prices but identical expiration.

Restricted to the difference in strike prices subtracted by the net premium received.

Straddle

High Volatility

Restricted to the entire premium paid.

Purchasing both a call and a put option at the exact same strike price and expiration date.

Unrestricted