Strategy Execution Benefits Disadvantages Component Parts Risk Profile

Long Call Buy a call Capped risk: Can lose entire stake if
Uncapped reward: the call expires OTM
Better leverage than (out of the money)

Long Put Buy a put Capped risk: Can lose entire stake if
Uncapped reward: the put expires OTM
Better leverage than (out of the money)
Straight stockshorting

Short call Sell a call Short-term income Uncapped risk and

(naked) strategy capped reward

Short Put Sell a put Short-term income Uncapped risk and

(naked) strategy capped reward

Covered Buy stock and sell Protected income Uncapped risk and
Call call strategy profit assured capped reward
If stock remains static
or rises. Calls can be
Sold on a monthly +
basis to generate income

Caller Buy stock, buy ATM Can be a riskless strategy Net debit out of your
Put and sell OTM if executed correctly with account. Works best
Call the right stock for long-term trades
Where you leave it alone + +
Covered Sell stock (short) Net credit into your Uncapped risk and
Put and sell put account capped reward +
Synthetic Buy stock and Capped risk and Expensive strategy
Call buy put uncapped reward
good insurance tactic +
Synthetic
Put
Short stock and
buy call
Capped risk and
uncapped reward
More complex than
simply buying puts +
Covered Buy stock and sell Enhanced income Very high risk and
Short
Straddle
put and call with
same strike and
expiration date
(compared with
covered call)
capped reward. Not
recommended + +
Covered Buy stock and sell Enhanced income Very high risk and
Short
Strangle
lower strike put
and higher strike call
with same expiration date
(compared with
covered call
capped reward. Not
recommended + +
Bull Call Buy lower strike Capped risk; lower Capped reward
Spread calls and sell higher
strike calls (same
expiration)
breakeven point than
simply buying a call +
Strategy Execution Benefits Disadvantages Component Parts Risk Profile
Bull Put Buy lower strike Capped risl; lower Capped reward
Spread puts and sell higher breakeven point
Strike puts (same
expiration)
than simply buying
a put; net credit
Into your account
+
Bear Call Sell lower strike Capped risk; Capped reward
Spread calls and buy
higher strike calls
(same expiration)
bearish income
strategy +
Bear Put Sell lower strike Capped risk Capped reward
Spread puts and buy
higher strike puts
(same expiration)
+
Bull Call Buy lower strike Cheap strategy Uncapped risk if
Ladder Calls. Sell higher stock rises sharply
Strike calls. And
Sell even higher
Strike calls (all
confusing as to
whether this is a
bullish or bearish
+ +
Same expiration) strategy

Bull Put Buy lower strike Uncapped reward as Expensive;

Ladder puts, buy higher the stock falls confusing as to
Strike puts, and
Sell even higher
Strike puts (all
whether this is a
bullish or bearish
strategy
+ +
Same expiration)

Bear Call Sell lower strike Uncapped reward as Expensive;

Ladder calls, buy higher the stock rises confusing as to
Strike calls, and whether this is a
buy even higher
Strike calls (all
bullish or bearish
strategy
+ +
Same expiration)

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CIN: U51909MH2003PLC140116