Choosing the right strategy is about matching your market outlook with the right statistical "edge". Use this cheat sheet to compare the 11 core strategies you have learned in our professional curriculum.
📊 Strategy Comparison Matrix
Strategy | Market Outlook | Trade Type | Prob. of Profit | Risk Profile | Trade | Implied Volatility (IV) |
Very Bullish | Debit (Pay) | Lower | Limited | Buy ITM Call (e.g., 0.7 Delta) | Low Preferred (Buy cheap) | |
Very Bearish | Debit (Pay) | Lower | Limited | Buy OTM Put | Low Preferred (Buy cheap) | |
Neutral to Bullish | Credit - ReceiveIncome | Highest | Unlimited | Sell OTM Put (0.15–0.20 Delta) | High Preferred (Sell rich) | |
Neutral/ Mildly Bullish | Credit - ReceiveIncome | High | Capped Upside | Own 100 shares + Sell OTM Call | High Preferred (Sell rich) | |
Neutral to Bullish | Credit - Receive Income | High | Defined | Sell higher Strike Put + Buy lower strike Put | High Preferred (Credit strategy) | |
Moderately Bullish | Debit (Pay) | Medium | Defined | Buy lower strike Call + Sell higher strike Call | Low/ Neutral | |
Neutral to Bearish | Credit - Receive Income | High | Defined | Sell OTM Call + Buy further OTM Call | High Preferred (Credit strategy) | |
Moderately Bearish | Debit (Pay) | Medium | Defined | Buy high-strike Put + Sell low-strike Put | Low/ Neutral | |
Slightly Bearish/ Neutral | Credit or Debit | High | Unlimited | Buy 1 ITM Put + Sell 2 OTM Puts | High Preferred | |
Moderately Bullish | Debit (Pay) | Medium | Defined | Buy deep ITM LEAP + Sell near-term OTM Call | Low IV for LEAP / High for Short Call | |
Recovery (Mildly Bullish) | Credit or Free | Medium | Neutral | Use 2:1 Ratio Call Spread against existing shares | High Preferred |
*Note: Short Puts require capital to purchase the shares if assigned.
**Note: Ratio spreads have undefined risk below the short strike.
***Note: The Stock Repair strategy is used to offset existing losses in stocks.
💡 Understanding the Headings
1. Market Outlook
Before trading, define your bias. Are you bullish (expecting a rise), bearish (expecting a drop), or neutral (expecting sideways movement)?
2. Trade Type: Debit vs. Credit
Debit (Pay): You pay money to enter. You are buying an opportunity for a big move. Risk is limited to what you paid.
Credit (Receive): You receive money upfront. You are the "Insurance Company." You profit if the stock stays away from your strike price.
3. Probability of Profit (PoP)
Credit strategies generally have a higher PoP because they can still be profitable even if you are slightly wrong about the market direction.
4. Implied Volatility (IV)
Think of IV as the "price of insurance".
When IV is Low: Options are "cheap." This is the best time to Buy (Debits).
When IV is High: Options are "expensive." This is the best time to Sell (Credits).
🚀 Next Steps
[ ] Review your market outlook: Determine your current bias - bull, bear or neutral.
[ ] Match the strategy: Use this sheet to find the setup that fits your outlook and risk tolerance.
[ ] Book your session: Schedule your FREE Strategy Session with Stephen to review your setup before going live.
'Invest with Confidence'