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Master Options Strategies

Understand structure, risk, and payoff — before you trade. Interactive tools to find, visualize, and learn every major options strategy.

📖 What is Options? 🔍 Find My Strategy
10Strategies
3Risk Levels
LivePayoff Charts

What is an Option?

A beginner's guide to understanding options contracts before you trade.

💡 Real-World Analogy

Imagine you find a house you love priced at $500,000. You pay the seller $5,000 to reserve the right to buy it at that price within the next 3 months — but you are not obligated to. If prices rise to $600,000, you exercise your right and profit. If prices fall, you simply walk away, losing only the $5,000 reservation fee. Options work the same way — the "reservation fee" is the premium, and the agreed price is the strike price.

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A Contract, Not a Stock

An option is a financial contract that gives the buyer the right — but not the obligation — to buy or sell an underlying asset (e.g. a stock) at a specified price (the strike price) on or before a set date (the expiration date).

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The Premium

The buyer pays a premium to the seller for this right. The premium is the maximum loss for the buyer. For the seller, the premium is income collected upfront — but the seller takes on the obligation to fulfill the contract if exercised.

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Expiration Date

Every option has a lifespan. After the expiration date, the contract ceases to exist. Options can expire weekly, monthly, or even years out (LEAPS). Time decay (theta) constantly erodes the value of an option as expiration approaches.

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Strike Price

The strike price is the agreed price at which the underlying can be bought or sold. A Call option profits when the stock rises above the strike. A Put option profits when the stock falls below the strike.

Type Right Granted Outlook Profit When… Max Loss (Buyer)
CALL Right to buy shares at strike 📈 Bullish Stock rises above strike + premium Premium paid
PUT Right to sell shares at strike 📉 Bearish Stock falls below strike − premium Premium paid

KEY TERMS

ITM
In-The-Money — the option has intrinsic value. A Call is ITM when stock price > strike; a Put is ITM when stock price < strike.
ATM
At-The-Money — the stock price is approximately equal to the strike price. ATM options have the highest time value.
OTM
Out-of-The-Money — the option has no intrinsic value yet. A Call is OTM when stock price < strike; a Put is OTM when stock price > strike.
IV
Implied Volatility — the market's forecast of future price movement. Higher IV = more expensive options (higher premium).
Theta (θ)
Time Decay — the daily erosion of an option's value as expiration approaches. Sellers benefit from theta; buyers are hurt by it.
Delta (Δ)
Sensitivity of the option price to a $1 move in the underlying. A delta of 0.50 means the option moves $0.50 for every $1 stock move.
🔍 Find Your First Strategy →

Strategy Finder

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1 Market Outlook
2 Risk Tolerance
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All Strategies

Browse all 10 strategies. Filter by any dimension.

Payoff Visualizer

Select a strategy, adjust strikes and premium — see P&L update live.

Strategy Building Blocks

See how complex strategies are composed from simpler spreads.