Options strategies and lessons

Why an option loses value every day, why the loss speeds up in the last week, and what Arthfy's history says about selling time at different distances from expiry.

How implied volatility moves option prices, why it collapses after events, and how long straddles have fared at different IV ranks.

Why an at-the-money option's delta swings wildly in the last hours, what that does to short straddles, and what the history of 0–2 day entries shows.

How Securities Transaction Tax is charged when an in-the-money option is exercised at expiry, how that changed since 2016, and what still catches traders out.

The arithmetic against buying options — the priced-in move, decay, IV crush and costs — and how often NIFTY actually moved enough, with Arthfy's buyer-odds check.

Margin is not risk: how to read the worst cycle on record against your own capital before choosing how many lots to trade.

What traders do when a position is tested — roll, add wings, close at a target or a stop — and what each costs.

What open interest, build-up labels, the put-call ratio and max pain can and cannot tell you.

How to read the at-the-money straddle and implied volatility as the market's expected range by expiry.

Lot sizes, expiry days and the November 2024 rules, and why Arthfy splits its history at 20 November 2024.

Buy one call option: the right to gain from a rise above the strike by expiry, for a fixed upfront premium that is the most you can lose.

Buy one put option: gains when the underlying falls below the strike by more than the premium; the premium is the most you can lose.

Sell a call and collect its premium: keep it if the underlying stays below the strike, with an open-ended loss if it rallies.

Sell a put and collect its premium: keep it if the underlying stays above the strike; lose heavily in a sharp fall.

Buy a call and sell a higher-strike call on the same expiry: a cheaper bullish position with the gain capped at the strike gap.

Buy a put and sell a lower-strike put on the same expiry: a cheaper bearish position with the gain capped at the strike gap.

Sell a put and buy a lower-strike put on the same expiry: collect a credit that is kept above the short strike, with the loss capped by the bought put.

Sell a call and buy a higher-strike call on the same expiry: keep the credit below the short strike, with the loss capped by the bought call.

Buy a call and a put at the same (at-the-money) strike: profits if the underlying moves further than the combined premium in either direction.

Sell a call and a put at the same at-the-money strike: collect the largest time value available, with open-ended losses on a large move either way.

Buy an out-of-the-money call and an out-of-the-money put: cheaper than a straddle, but the move must be larger before it pays.

Sell an out-of-the-money call and an out-of-the-money put: keep the credit if the underlying stays between the strikes; open-ended losses outside them.

Buy two at-the-money calls and one at-the-money put: a long straddle tilted to profit faster from a rise.

Buy one at-the-money call and two at-the-money puts: a long straddle tilted to profit faster from a fall.

Sell an out-of-the-money put spread and an out-of-the-money call spread: keep the credit if the underlying stays between the short strikes, with both tails capped.

Buy an out-of-the-money put spread and an out-of-the-money call spread: a capped bet on a break out of the range.

Sell an at-the-money straddle and buy an out-of-the-money call and put as wings: the short straddle's income with a capped loss.

Buy a lower call, sell two middle calls at different strikes, buy a higher call: an all-call condor paid for upfront that profits in a range.

Buy one lower call, sell two middle calls, buy one higher call: a small debit that pays most if the underlying settles at the middle strike.

Buy one higher put, sell two middle puts, buy one lower put: the put version of the butterfly, with the same tent-shaped payoff.

Sell one lower call, buy two middle calls, sell one higher call: a small credit kept if the underlying ends beyond either wing.

A put butterfly whose lower wing sits further away: often entered for a small credit, with no loss above the top strike and a capped loss below.

A call butterfly whose upper wing sits further away: at most the small net debit (if any) below the bottom strike, a profit tent at the middle strike, and a larger but capped loss on a big rally.

Sell a near-expiry call and buy a later-expiry call at the same strike: earns as the near option decays faster than the far one.

Sell a near-expiry put and buy a later-expiry put at the same strike: the put version of the calendar.

Buy a later-expiry in-the-money call and sell a near-expiry out-of-the-money call: a cheaper stand-in for a covered call.

Buy a later-expiry in-the-money put and sell a near-expiry out-of-the-money put: a bearish position that earns near-term decay.

A put calendar below the price and a call calendar above it: a wider profit zone than a single calendar, with long volatility.

Sell a near-expiry strangle and buy a later-expiry strangle further out: an iron condor whose wings are in a later month.

Buy a near-expiry option and sell a later-expiry option at the same strike: gains on a big move before the near expiry, or a fall in the far month's volatility.

Buy one call and sell two higher-strike calls: little or no cost, a profit peak at the short strike, and open-ended risk on a strong rally.

Buy one put and sell two lower-strike puts: little or no cost, a profit peak at the short strike, and large risk in a crash.

Sell one call and buy two higher-strike calls: unlimited gain on a strong rally, a small result on a fall, and the worst outcome at the bought strike.

Sell one put and buy two lower-strike puts: large gains in a sharp fall, worst outcome at the bought strike.

Hold long futures and sell an out-of-the-money call against them: the call premium cushions small falls, and the upside stops at the strike.

Hold long futures and buy a put: the futures keep the upside, the put caps the loss below its strike for the cost of its premium.

Long futures, a bought put below and a sold call above: the call premium pays for the put, and the position is boxed between the two strikes.

Hold short futures and sell an out-of-the-money put: the premium cushions small rises, and the gain stops below the put strike.

Hold short futures and buy a call: the call caps the loss if the market rallies, for the cost of its premium.

Buy a call and sell a put at the same strike and expiry: the pair moves point for point with the underlying, like long futures.

Sell a call and buy a put at the same strike and expiry: the pair moves inversely point for point, like short futures.

Sell an out-of-the-money put to buy an out-of-the-money call: little or no net premium, a gain above the call, and a futures-like loss below the put.

Sell a put, and sell a call spread above the price: if the total credit is at least the call spread's width, there is no loss on a rally.

Buy a call spread and sell an out-of-the-money put to pay for it: little or no net cost, a capped gain above, and a short put's risk below.

A bull call spread plus a bear put spread on the same strikes: worth exactly the strike gap at expiry, so its price is a pure interest rate.