Structures, not predictions.

A covered call is selling a call option against shares you already own. If the stock stays below the strike, you keep the shares and the premium collected; if it rises above the strike, the shares are called away at that price, capping the upside in exchange for the premium.

It's structured as an income strategy on a position you're willing to hold or sell at the strike price — the tradeoff is giving up upside beyond the strike in exchange for the premium, which lowers the position's overall cost basis and reduces its breakeven.

The main risk isn't the option — it's still owning the underlying shares, which can fall in value by more than the premium collected offsets.

A protective put is buying a put option against shares you own, setting a floor on how much the position can lose below the strike price, similar in concept to insurance with a deductible equal to the distance between the current price and the strike.

The cost is the put's premium, paid regardless of whether the underlying falls — if the stock stays flat or rises, the put simply expires worthless and the premium is the cost of that protection.

It's most commonly used ahead of a known event with binary risk (earnings, a regulatory decision) where a trader wants to keep the position but limit the downside from a specific catalyst.

A bull call spread buys a call at a lower strike and sells a call at a higher strike, both with the same expiry. The short call's premium partly offsets the long call's cost, reducing the position's cost and breakeven compared to buying the call outright — at the expense of capping the maximum profit at the difference between the strikes, minus the net premium paid.

It expresses a moderately bullish view: profit is maximized if the underlying finishes at or above the higher strike, and the defined-risk structure means the maximum loss is known upfront as the net premium paid, unlike a naked long call where the risk is the same but capital efficiency and breakeven differ.

A bear put spread buys a put at a higher strike and sells a put at a lower strike, both with the same expiry. It's the mirror of a bull call spread: the short put reduces the cost of the long put, capping both the maximum profit and the maximum loss.

Maximum profit is realized if the underlying finishes at or below the lower strike; maximum loss is the net premium paid if it finishes above the higher strike. It's used to express a moderately bearish view with defined, known risk rather than the theoretically larger exposure of a naked long put position sized the same way.

A long straddle buys a call and a put at the same strike and expiry, profiting from a large move in either direction. It's a pure volatility bet — the position doesn't care which way the underlying moves, only that it moves enough to cover the combined premium of both legs.

The main risk is time decay working against both legs simultaneously if the underlying stays range-bound; a straddle can lose value every day the market stays quiet, even with no directional loss.

A short straddle is the inverse — selling both the call and put to collect premium, betting the underlying stays within a range. It carries theoretically unlimited risk on both sides if the underlying makes a large move, which is why it's typically managed with adjustments rather than held to expiry unmanaged.

A strangle is structurally similar to a straddle but uses an out-of-the-money call and an out-of-the-money put instead of the same strike for both. This lowers the combined premium compared to a straddle, but requires a larger move in the underlying to reach breakeven since both strikes start further from the current price.

Like a straddle, a long strangle is a bet on movement rather than direction, and a short strangle collects premium betting the underlying stays inside a wider range than a short straddle would require — with a similarly open-ended risk profile if that range is broken.

An iron condor combines a bear call spread and a bull put spread on the same underlying and expiry — selling a call spread above the current price and a put spread below it. It profits if the underlying stays between the two short strikes through expiry.

Because both spreads are defined-risk (each has a long option capping the short option's exposure), the maximum loss is known upfront, unlike a short strangle. The tradeoff is a smaller maximum profit, since the long options that cap the risk also cost premium.

It's a common structure for expressing a range-bound view with strictly limited downside, which is part of why it's popular for systematic and automated options strategies where unmanaged tail risk isn't acceptable.

An iron butterfly sells a call and a put at the same at-the-money strike, then buys a call above and a put below to cap the risk — effectively a short straddle with defined-risk wings added on both sides.

It profits most if the underlying finishes exactly at the short strike at expiry, with profit tapering off as price moves away in either direction until the long wings are reached, at which point the loss is capped. Compared to an iron condor, it typically has a higher maximum profit but a narrower profitable range, since the short strikes sit at a single price rather than a spread.