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This is a spread  where the premium received from selling part of the spread is greater than the premium paid for the other part of the spread. For instance, if…

This is when you put on a short option position and hedge it with another option position or with long shares. This is essentially the opposite of a naked write.

This is when you sell a straddle against shares that you already own. It is important to note that the covered straddle is not really fully covered since only the…

A covered call is executed when you buy the underlying stock/shares and then sell Calls against it. The trade is considered covered because the shares will cover what is now…

This method is normally used when Options are overpriced. The trader would simply buy stocks in the open market and sell the equivalent position in the options market. This is…

The condor is basically a combination of a bull call spread and a bear call spread. Essentially, options with consecutive strike prices, buying options with a lower exercise price, and…

This is when you own shares in a particular stock and then you sell Calls against it and then buy Puts. You would use this strategy when you think that…

This is an order that you would place to offset an existing long position. For example, If you buy a call option to open a new position, you would then…

A closing purchase is an order that you place to offset an existing short position. For example, If you sell a call option to open a new position, you would…

There are some options settle for cash rather than shares. Indexes like the S&P 500 Index (.SPX) and the S&P 100 Index (.OEX) are examples of cash settled options.