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Options strategy comparison chart: which strategy fits what you expect?

Pick an options strategy by answering three things: which way you think the stock will go, how far and how fast, and what you can afford to lose if you're wrong. This chart lines up every common strategy against those answers.

Options guide · 14-minute read · Updated 2026-11-09

The answer in one line

Start with what you expect, then pick the strategy whose worst case you can live with. If you think a stock will rise slowly or sit still, selling premium (a Covered call or a Cash-secured put) fits. If you think it will move fast, buying an option or a debit spread fits. If you own shares and fear a drop, a hedge fits. The chart below shows every common choice with its max gain, max loss, break-even and the cash it ties up.

Most people pick by the best case. That's backwards. Every strategy on this page looks good when you're right. They differ in what happens when you're wrong.

Step 1: what do you expect?

Find your view in the left column. The strategies to its right are the ones built for it.

Sellers are paid for time passing and nothing much happening. Buyers pay for a move to happen, and soon. That one difference explains most of the chart.

Step 2: the full comparison chart

All figures are per share; multiply by 100 for one contract. "Credit" is what you collect, "debit" is what you pay, and "width" is the gap between the two strikes of a spread.

Strategies that sell premium

Strategies that buy premium

Hedges on shares you own

Two rows deserve a warning. A calendar and a diagonal have no fixed break-even, because they mix two expiry dates and their value depends on Implied volatility when the near leg expires. And a short strangle or short straddle has no limit on the upside. Those two are the only rows here with no limit on the loss.

Step 3: the worked example (hypothetical)

Thistle Creek Foods, a made-up stock, trades at $50. You think it rises to about $56 over the next 45 days. Three strategies fit that view.

• Cash-secured put: sell the $45 put for $1.00.
• Bull call spread: buy the $50 call, sell the $55 call, for a $2.00 debit.
• Long call: buy the $50 call for $3.00.

Scored on the chart's columns, for one contract:

How the numbers come out: the put's max loss is ($45 − $1) × 100 = $4,400, if the stock went to zero. The spread's max gain is the $5 width minus the $2 debit, times 100 = $300. The call's break-even is $50 + $3 = $53.

Now run them through five endings:

When the outlook is wrong

You were wrong. Thistle Creek misses its sales numbers and drops to $40.

• The long call loses its $300. That's all of it, but it's all it could ever lose.
• The bull call spread loses its $200. Same story, smaller.
• The cash-secured put loses $400 on paper, and that's only the start. You've been assigned 100 shares at $45, paid $4,500 for them, and they're worth $4,000. If the slide keeps going to $35, the loss is $900, and it keeps growing with every dollar down.

So which strategy loses most when the outlook is wrong? In dollars, the cash-secured put, and its loss has the most room to grow. As a share of the cash you put in, the long call and the spread, which both lose 100%.

Which one fits? The put suits someone who'd be glad to own Thistle Creek at $45 and has $4,500 to set aside; it's the first step of the wheel strategy. The spread suits someone who wants a lower break-even and a smaller fixed loss than the call, and can accept a $300 cap. The long call suits someone sure of a big move soon. Try your own numbers in the options strategy payoff calculator, or let the options strategy finder narrow the list by your view and account.

Three checks before you pick any row

1. What happens if I'm wrong? Look at the max loss column first. If it says "no limit," or a number bigger than you can afford, the row is out, however good the best case looks.
2. How much cash does it hold, and for how long? A cash-secured put holds the full strike. A spread holds the width. Money held in one trade can't protect you in another.
3. Am I allowed to place it? Covered calls and protective puts need the lowest approval level at most brokers. Spreads need more. Uncovered calls need the top level. Options approval levels explained shows the ladder.

In Canada, covered calls and long puts are widely allowed in a TFSA or RRSP, cash-secured puts and spreads depend on the broker, and uncovered calls generally aren't allowed.

Read this comparison next

Every comparison in this set takes two rows of the chart and runs them through the same numbers.

Hedges and protection: protective put vs stop loss, protective put vs collar, put spread collar vs collar, married put vs protective put, buffer ETF vs collar, risk reversal vs collar, inverse ETF vs put options, hedging vs diversification, covered call vs protective put, the zero-cost collar.

Spreads and premium selling: debit spread vs credit spread, bull put spread vs bear call spread, iron condor vs short strangle, iron condor vs credit spread, calendar spread vs diagonal spread, calendar spread vs iron condor, jade lizard vs short strangle, short straddle vs iron butterfly, iron butterfly vs iron condor, short put vs bull put spread, covered call vs bear call spread, the wheel vs an iron condor, short strangle vs the wheel.

Owning, borrowing and funds: synthetic long stock vs buying stock, buying calls vs buying stock on margin, cash-secured put vs T-bills, covered calls vs bonds, covered call ETF vs put-write ETF, stock repair vs averaging down, LEAPS vs buying shares, covered call vs cash-secured put.

The Greeks and the odds: gamma vs theta, IV crush vs theta decay, IV rank vs IV percentile, delta vs probability of profit, probability of profit vs expected value, probability of touch vs probability ITM, expected move vs standard deviation, volatility skew vs smile, strike price vs break-even, notional value vs buying power, mark price vs last price.

Expiry and the contract itself: AM settled vs PM settled, automatic exercise vs do not exercise, exercise vs sell an option, stop loss on options vs mental stop, options vs warrants, binary options vs options, employee stock options vs trading options, crypto options vs stock options, day trading vs options trading.

Taxes: Section 1256 vs equity options, qualified vs unqualified covered call, FIFO vs specific identification.

Stops and sizing: ATR stop vs percentage stop, averaging down vs stop loss, buy stop vs buy limit, mental stop vs hard stop, trailing stop vs trailing stop limit, fixed fractional vs fixed dollar, Kelly criterion vs fixed fractional, Sharpe vs Sortino.

Reading a company before you sell a put: debt to equity vs current ratio, free cash flow vs net income, gross margin vs net margin, equal weight vs market cap weight.

Reading the chart: Fibonacci retracement vs extension, head and shoulders vs double top, leading vs lagging indicators, relative strength vs RSI, volume profile vs VWAP, wedge vs triangle, historical volatility vs ATR.

Crypto, forex and prop firms: perpetual vs quarterly futures, pip vs point vs tick, instant funding vs evaluation, one-step vs two-step prop challenge.

For the strategies themselves, one at a time: covered calls, cash-secured puts, vertical spreads, the iron condor, the short strangle, the calendar spread, the diagonal spread, the jade lizard, LEAPS and a long straddle before earnings. The map of everything past covered calls and puts is option strategies beyond the wheel; for a flat market, see options strategies for a sideways market, and for a small one, options strategies for a small account.

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