Options Trading Strategies Cheatsheet

based on Price Outlook, Volatility Outlook, Profit Potential, and Risk

Here is a concise cheat sheet grouping popular options strategies based on Price Outlook, Volatility Outlook, Profit Potential, and Risk for quick reference and learning:

Summary of Key Characteristics

• Profit Potential:

  • Unlimited: Long calls, long puts (to zero), long straddles, long strangles.

  • Limited: Spreads (bull call, bear put), iron condor, covered calls/puts.

• Risk:

  • Limited: Buying options (premium paid), spreads, protective strategies.

  • Unlimited: Naked short options (naked calls, naked puts), short straddles/strangles.

• Volatility Outlook:

  • Rising Volatility: Long straddle, long strangle (benefit from big moves).

  • Falling/Stable Volatility: Iron condor, short straddle, short strangle (profit from little movement).

• Price Outlook:

  • Bullish: Long call, bull call spread, covered call, naked put.

  • Bearish: Long put, bear put spread, naked call, protective call.

  • Neutral: Short straddle, short strangle, iron condor.

  • Volatile: Long straddle, long strangle.

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This cheat sheet provides a quick reference to select options strategies based on your market view and risk tolerance123. For risk management, consider setting stop-loss orders tailored to each strategy's characteristics to limit losses4.