Income
Suitable for investors who want to structure an existing stock position more
defensively while collecting option premium.
- Trigger Sideways to mildly bullish view with elevated implied volatility.
- Execution Hold the stock and sell a slightly in-the-money call against it.
- Risk Upside is capped while the stock's downside risk remains.
Income
Suitable for existing stock positions when recurring premium should be collected
while leaving more upside open than with the ITM variant.
- Trigger Sideways to moderately bullish view with healthy implied volatility.
- Execution Hold the stock and sell an out-of-the-money call against it.
- Risk Stock downside remains, while upside is capped once price moves above the strike.
Income
Suitable for investors who are willing to own the stock at a discounted entry and
then collect recurring premium through covered calls.
- Trigger A solid underlying you truly want to own, plus liquid options.
- Execution Sell an OTM short put first, take assignment if needed, then sell an OTM covered call.
- Risk After assignment, the position carries the full stock downside while upside gets capped by the call.
Directional
Suitable for a bullish to slightly neutral view with defined risk and recurring premium collection via a credit spread.
- Trigger Bullish market thesis with preferably elevated IV and a clearly defined support zone.
- Execution Sell the higher-strike put and buy a lower-strike put in the same expiration.
- Risk Profit and loss are both capped; below the long put the maximum loss is reached.
Premium
Suitable for a neutral to mildly bullish view when elevated implied volatility offers rich premium and upside should remain controlled.
- Trigger Sideways to slightly bullish market thesis with healthy IV and a well-defined support zone.
- Execution Classically built from one short put plus a bear call spread in the same expiration.
- Risk Downside remains below the short put; upside is capped, but with the right credit the structure can be built without true upside risk.
Volatility
Suitable for setups where time value, expiries, and a clearly defined target zone
should work together.
- Trigger Expectation of a limited move with an interesting term-structure setup.
- Execution Combination of butterfly logic and diagonal expiry selection.
- Risk The structure is more complex and reacts sensitively to time and volatility.
Event
Suitable for stocks with upcoming earnings when elevated implied volatility is priced in
before the report and a post-event volatility crush is expected.
- Trigger Liquid stock with near-term earnings, a visible expected move, and rich event IV.
- Execution Classic earnings ideas include calendar or diagonal spreads; in practice, an iron fly can also be used around the expected move.
- Risk A move that exceeds the expected range can hurt quickly, even if the volatility crush does arrive.
Intraday
Ultra-short-dated options trading on the S&P 500 with same-day expiration, only
for clearly defined setups and strict risk control.
- Trigger Intraday levels, event reaction, or momentum setup in SPX.
- Execution Small size, pre-defined exit, and no hope-based trades.
- Risk Extremely fast theta decay and very high gamma sensitivity.
Hedge
Suitable for existing stock positions when downside should be actively limited and
part of the put cost is financed through a short call.
- Trigger Uncertain environment after a strong rally or ahead of elevated event risk.
- Execution Hold the stock, buy a put, and sell a call to help finance the hedge.
- Risk Downside is limited, but upside participation is capped as well.