Options strategy families, and which readings they answer to

Last updated 2026-09-26

This page teaches the shapes traders build from calls and puts, and which of this desk's own readings argue for one over another. The desk picks one family per name from a fixed table, and it never touches your own money.

At a glance

What this page teaches. Which option strategy families fit a name's own readings on this desk.
Where the families come from. The same handful of shapes every options textbook teaches: buying or selling calls and puts, alone or in pairs.
How the desk picks one. Trade Cards' own priced row, when it has one. Otherwise, whether the desk is bullish or bearish, and IV rank against fifty percent. See the table below.
How the Ask uses it. It states the family the desk picked, with the entry and exit criteria, then teaches the other families that fit.

Key difference. The desk teaches which families fit the readings it holds and picks one from a fixed table. It builds no trade for you and speaks to nobody's own money.

How the desk picks the family for a name

Trade Cards, the Read-out and the desk's view now name the same family for a name on a trading day. One rule, not two.

Trade Cards already priced a structure tonight. The Read-out and the desk's view quote that exact structure. Its name, its legs and strikes, its expiry, its limit, and the market's own odds of profit at expiry. When Trade Cards' own ladder fell back from its first choice, because a leg could not be priced, the fit names that reason too.
Trade Cards carries no row for the name. An ETF, or a name the model does not rank. Every surface then picks from the same table below, by side and by IV rank against fifty percent, the rule Trade Cards' own ladder starts from.

The table, when there is no row to quote:

Bullish and IV rank 50 or more. A cash-secured put: sell a put below the price.
Bullish and under 50. A bull call spread: buy a call spread.
Bearish and IV rank 50 or more. A bear call spread: sell a call spread above the price.
Bearish and under 50. A bear put spread: buy a put spread.
Neutral and IV rank 50 or more. An iron condor: sell both sides, with the loss defined.
Neutral and under 50, or IV rank unknown. A long straddle, or a calendar.
A report inside the near month. The desk says so first, and names the two families that trade the report itself: the straddle and the calendar. The family from the table still follows, on the date past the report.

IV rank is the share of a name's own weekly implied volatility readings that sit below tonight's. Fifty percent is the one cut every surface reads. With no weekly record long enough to rank tonight's reading, IV rank reads as under fifty, the bought side of the table.

Rich, cheap and middle are a separate word, still shown on the Options line. It states where tonight's pricing sits against four in five of the name's own weekly readings. It no longer decides the family. IV rank against fifty percent does that now, on Trade Cards and everywhere else.

With no row to quote, the entry and the exit are written over the desk's own levels. Those are the swing low and the swing high nearest the last close, each with its date. The near month's priced range is stated in dollars beside them. A credit spread's short strike sits outside that range. A debit spread's short strike sits inside it. Close a credit spread at half the credit or with three weeks left. Close a debit spread at twice the debit or at the level the view names. A quoted row instead uses Trade Cards' own limit and expiry, whatever they are.

Every family carries the same record line, word for word:

The desk builds no position and has no paper record on this family yet. Its own tests of options books on its signals lost to the plain share book after costs. So this is the family a reading like this one is commonly discussed under, not a tested edge.

How to read the readings first

Eight readings on this desk decide which family fits a name. Open the pane each one lives on before you read the families below.

Whether the desk is bullish or bearish, and over which horizon. Trade Cards states tonight's signals. The Rank Check layout shows the three time frame reads for one name. A trader who is long over one horizon and short over another is really asking two separate questions, not one.
IV vs own history. The Options Screener carries it as a column, and Volatility History draws the full record behind it. A high reading means options cost more than usual for that name, which rewards a seller and taxes a buyer. A low reading is the reverse.
Implied against realized. Volatility History's second tab compares what options charge against what the shares actually moved. Implied running above realized rewards selling the extra premium; implied running below realized rewards buying it.
The priced move by expiry. Priced Range, in the table under the fan, states the up leg and the down leg the market prices in, separately, for a chosen date. It sets how far out a strike has to sit to count as a real distance.
Skew. Volatility Smile's 90/110 reading is the downside strike's implied volatility minus the strike nearest the share price. A wide gap means the market already charges more to protect against a fall.
Term structure. Volatility Weather draws the curve across expiry dates, and the same figure prints as term slope on the Options Screener. A curve running downward, near dates priced above far ones, is called inverted.
The next report date. Earnings Radar states when a name next reports, and whether that date sits inside the expiry you are looking at. A report date inside the screen is an event, priced or not.
Delta per strike. Strike Table states the average delta of the open contracts at each strike. That is how far out of the money a given strike sits, in the market's own terms.

The families

Eighteen shapes, covering twenty names once a few are grouped together. Each one states what it is and the view it expresses. It names which readings favor and argue against it, the payoff shape, the risk to know first, and what traders check before running one.

Long call

Buying one call option. It expresses a bullish view, wanting the shares to rise, and it also gains from a jump in implied volatility. It fits a desk that is bullish, IV priced cheap against its own history, and implied running below realized. It argues against itself when IV already sits rich against its history, since the same call then costs more to buy. Max loss is the premium paid, capped and known upfront. Max gain has no fixed ceiling as the shares rise. Breakeven sits at the strike plus the premium paid. The risk to know first is time decay, which reduces the premium every day whether the shares move or not. Traders check IV vs own history and the priced move before paying for one.

Long put

The mirror of a long call, bearish instead of bullish. It fits a desk that is bearish, IV cheap against its own history, and implied below realized. Max loss is the premium paid. Max gain grows as the shares fall toward zero, capped by the strike minus the premium. The risk to know first is the same time decay, plus the fact that downside strikes are usually already priced richer than upside ones. Traders check the 90/110 skew before buying, since it states how much extra that richer pricing costs.

Covered call

Own the shares, and sell one call against them. It expresses a neutral to mildly bullish view, collecting income while holding. It fits IV priced rich against its own history and a desk that is neutral or only mildly bullish. It argues against itself when the desk is strongly bullish, since the sold call caps the exact upside the reading favors. It also argues against itself when a report date sits inside the expiry on a name that does not usually move much. Max gain is the strike minus the share cost, plus the premium collected. Max loss is nearly the full value of the shares, cushioned only by the premium. The risk to know first is that the shares stay fully exposed to a fall below the strike. Traders check IV vs own history for the size of the premium and the priced move to see how far the strike sits from today's price.

Cash secured put

Sell one put, holding the cash to buy the shares if the put is assigned. It expresses a willingness to own the shares at a lower price while collecting income now. It fits IV priced rich against its own history and a steep downside skew. It also fits a desk that is bullish over the longer horizons, even when the short term looks choppy. Max gain is the premium collected. Max loss is the strike minus the premium, if the shares fall to zero. The risk to know first is full downside exposure below the strike, the same exposure as owning the shares outright from there. Traders check IV vs own history and the strike against the priced move down before selling one.

Protective put

Own the shares, and buy a put below the current price. It stays a bullish position on the shares, adding insurance against a fall. It fits a desk that is bullish but shows a report date inside the expiry, or a priced move down that looks larger than usual. It argues against itself when IV already sits rich against its history, since the insurance costs more exactly when the reading calls for it. Max loss is the gap between the share price and the strike, plus the premium paid. Max gain has no fixed ceiling above, reduced by the premium. The risk to know first is that the premium is a real cost every time, and it can expire worth nothing. Traders check IV vs own history for the cost of the insurance and the report date for the reason to buy it.

Collar

Own the shares, sell a call, and buy a put with roughly the proceeds. It expresses a neutral view, protecting a holding cheaply by giving up some upside. It fits IV priced rich against its own history, since the sold call funds more of the bought put. It also fits a report date inside the expiry that a holder wants to sit through cheaply. It argues against itself when the desk is strongly bullish, since the call caps the gain the reading argues for. Max gain and max loss are both capped and known in advance, at the call strike and the put strike. The risk to know first is that it still gives up the upside past the call strike, and both legs need to be carried together. Traders check skew and term slope to see which strike is priced cheap and which is priced rich before choosing them.

Bull call spread (debit)

Buy a call, and sell a further out call against it. It expresses a bullish view on a moderate rise rather than an unlimited one. It fits a desk that is bullish, especially when IV is priced rich against its history. A single bought call would otherwise cost more than the reading argues it is worth. Max gain is the strike gap minus the premium paid. Max loss is the premium paid. Breakeven sits at the lower strike plus the premium. The risk to know first is that the gain is capped even on a large rise. Traders check term slope and skew to price the two strikes fairly against each other.

Bear put spread (debit)

The mirror of a bull call spread, bearish. Buy a put, and sell a further out put below it. It fits a desk that is bearish and IV priced rich against its history. Max gain is the strike gap minus the premium paid. Max loss is the premium paid. The risk to know first is a capped gain on a large fall. Traders check the downside skew, since both legs sit on the pricier side of the chain.

Bull put spread (credit)

Sell a put, and buy a further out put below it for protection. It expresses a neutral to bullish view, collecting premium with the loss defined upfront. It fits IV priced rich against its own history and a desk that is bullish or flat. A steep downside skew also fits, since it rewards selling into the richer side. It argues against itself when the desk is bearish or IV is already cheap. Max gain is the premium collected. Max loss is the strike gap minus the premium, which can run to several times the premium collected. Traders check the short strike against the priced move down, so it sits outside a normal trading day's range.

Bear call spread (credit)

The mirror of a bull put spread, bearish. Sell a call, and buy a further out call above it. It fits a desk that is bearish and IV priced rich against its history. Max gain is the premium collected. Max loss is the strike gap minus the premium. Traders check the priced move up and the term slope before choosing the short strike.

Long straddle

Buy a call and a put at the same strike. It expresses a bet on a big move without a view on direction. It fits IV priced cheap against its own history and implied running below realized. It also fits a report date inside the expiry that the market has not priced up yet. It argues against itself when IV already sits rich, since both legs then cost more. Max loss is both premiums paid. Max gain has no fixed ceiling, but needs a move larger than the combined premium either way. The risk to know first: a genuinely large move is required just to clear the cost. Time decay also works against both legs at once. Traders check implied against realized and the priced move against the premium paid.

Long strangle

The same bet as a straddle, using two different strikes instead of one, cheaper to open but needing a bigger move to pay off. It fits the same readings as a straddle, cheap IV and an unpriced report date. Max loss is both premiums paid. Max gain has no fixed ceiling past either strike. The risk to know first is that it needs an even larger move than a straddle. The strike gap adds to the cost that has to be cleared. Traders check the priced move to place the two strikes at a realistic distance.

Short strangle and short straddle

Sell a call and a put, at different strikes for a strangle or the same strike for a straddle, collecting two premiums. It expresses a bet on a quiet name, little movement either way. It fits IV priced rich against its own history, a term structure that is not inverted, and no report date inside the expiry. The risk to know first, stated plainly: both carry undefined risk. A large move either way can cost far more than the premium collected, with no cap at all on a sharp rise. It argues against itself whenever a report date sits inside the expiry, or the desk shows a real clear side either way. Traders check IV vs own history and the report date before ever running one.

Iron condor

A bull put spread and a bear call spread run together, four legs, with the loss defined on both sides. It expresses a bet that the shares stay inside a range. It fits IV priced rich against its own history and a flat term structure. It also wants no report date inside the expiry, and a desk showing no strong side either way. Max gain is the combined premium collected. Max loss is the wider strike gap minus the premium, capped but still a multiple of what was collected. The risk to know first is that the defined loss still runs several times the premium if the shares pass either short strike. Traders check the priced move, to place both short strikes outside a normal range. They also check the skew, since the two sides rarely sit the same distance out.

Iron butterfly

The same shape as an iron condor, with both short strikes at the same price instead of spread apart. That collects more premium for a tighter range. It fits the same readings as a condor, plus a priced move that looks small. Max gain is largest at the centre strike, and shrinks toward the wings. Max loss is the wing width minus the premium. The risk to know first is that it needs the shares to sit close to one price at expiry, so a real move fails it. Traders check the priced move to place the wings at a realistic distance.

Calendar spread

Sell a near dated option, and buy the same strike further out. It expresses a bet that the shares sit near the strike through the near date, or that longer dated implied volatility rises. It fits a term structure that is inverted, near dates priced above far ones, since that makes the sold leg richer than the bought one. It argues against itself when the term structure already runs the normal way, since the far leg then costs more than usual. Max loss is the net premium paid, known upfront. Max gain depends on where the shares sit when the near leg expires, and is not one fixed number. The risk to know first is that the position changes shape entirely once the near leg is closed or expires. Traders check the Volatility Weather curve and the term slope figure before running one.

Diagonal spread

A calendar spread built with different strikes on the two expiries instead of the same one. It expresses a term structure view alongside a mild direction. It fits the same term structure readings as a calendar, plus a strike gap chosen to match whether the desk is bullish or bearish. The risk to know first is that it combines the calendar's shape risk with a directional one, harder to reason about than either alone. Traders check the term slope and the desk's own side together, since the trade blends both readings.

Call and put ratio spreads and backspreads

Unequal numbers of options at two strikes. A ratio spread might buy one call and sell two further out. A backspread sells one and buys two. A ratio spread expresses a moderate move with volatility priced flat or falling. A backspread expresses a large move, often helped by rising volatility. Ratio spreads fit calm, IV rich readings. Backspreads fit the same setup as a long straddle, IV priced cheap with a move expected. The risk to know first: a ratio spread carries undefined risk past its extra short strike, the same caution a short strangle carries. Traders check the priced move and IV vs own history, since the wrong ratio in the wrong volatility setting turns income into open ended risk.

Long butterfly

Buy one strike, sell two at the strike in the middle, and buy one further out, all calls or all puts. It expresses a bet that the shares land very close to the middle strike. It fits IV priced rich against its own history, no report date inside the expiry, and a small priced move. Max gain sits at the centre strike, at the wing width minus the small premium paid. Max loss is that small premium, known upfront. The risk to know first is that it is cheap to run, but pays off in full only inside a narrow range. Traders check the priced move to place the wings at a realistic distance.

The wheel

A cycle of two families already covered here. Sell a cash secured put, and if the shares get assigned, sell a covered call against them, then start again. It expresses a willingness to own the shares, collecting a premium at every step. It fits IV priced rich against its own history through the cycle. It also fits a desk that is not strongly bearish on the name for long stretches. The risk to know first is that full downside exposure to the shares runs through the whole cycle, the same as owning them outright. Traders check IV vs own history and the desk's longer horizon side before starting a new turn of the cycle.

Which family fits which readings

Reading pattern	Families traders reach for	Families they avoid
Desk is bullish, IV cheap vs own history, implied below realized	Long call, bull call spread	Short strangle, short straddle, covered call
Desk is bullish, IV rich vs own history, implied above realized	Bull put spread, cash secured put, covered call	Long call bought outright, long straddle
Desk is bearish, IV cheap vs own history	Long put, bear put spread	Bear call spread, short strangle
Desk is bearish, IV rich vs own history	Bear call spread	Long put bought outright, long straddle
Neutral, IV rich, no report date inside the expiry	Iron condor, short strangle	Long straddle, long strangle
Neutral, IV cheap vs own history	Long straddle, long strangle	Iron condor, iron butterfly, short strangle
A report date sits inside the expiry, IV already rich ahead of it	A defined risk credit spread, or a calendar timed past the date	Short strangle, short straddle
Steep downside skew on the 90/110 reading	Cash secured put, bull put spread	Buying a protective put at that moment, a bear call spread priced off the cheap side
Term structure inverted, near dates priced above far ones	Calendar spread, selling the rich near leg against the cheap far one	Buying the near dated option alone

Worked example, in the desk's words

A fictional name, BRINEX, ticker BRNX, trading at $58.10. The desk's readings tonight: it is bearish over the next few weeks and bullish over the coming months, a split across the two time frames. IV vs own history sits at 88%. Implied volatility reads 52%, against realized volatility of 31% over the last 20 trading days and 34% over the last 60. The priced move to the nearest expiry is 7.4% up and 9.1% down. The 90/110 skew reads 5.8 points, downside pricier. Term slope reads negative 3.1 points, near dates priced above far ones. A report date sits 11 days out, announced by the company, inside that expiry.

Two families fit this set of readings. Short term, IV priced rich ahead of a report date argues for a bear call spread. That spread is a sold call and a bought call above it, a defined loss. It benefits if the rich premium falls back once the report passes. Longer term, the same rich premium plus the desk's bullish signal over the coming months argues for a cash secured put struck below today's price. It collects the rich premium now. It would leave the holder owning BRNX at a price the longer horizon already favors.

What the desk would say: "BRNX prices options above 88% of its own past year. There is a report in 11 days, and the short term signal is bearish. A bear call spread fits that combination and defines its loss upfront. The same rich premium, paired with the bullish signal over the coming months, also argues for a cash secured put below today's price. A long straddle does not fit here: the premium is already rich, which taxes a buyer rather than rewarding one. Nothing here is a trade, a strike or a size, and it is not built for any one reader's account."

What the desk does and does not do

What it teaches. Which strategy families fit the readings this desk holds for a name, tonight, in the same words for every reader.
What it picks. One family per name from the table above, with entry and exit criteria over its own levels, and the month to look at.
What it never builds. No position, no exact strike and no size. The criteria name a level and a priced range, and stop there.
What it never knows. Your account, your holdings or your own money. Every answer is the same words for every reader who asks about that name.
Where the trade happens. You take the family to your own broker's own tools to choose a strike, an expiry and a size that fit your own account.