Skill: jseale/options-strategies-lite (version 1.0.0)

--- name: Options Strategies Lite slug: options-strategies-lite version: 1.0.0 description: > Options strategy selector and plain-English guide to 5 core strategies. Tell me your market outlook and I'll point you to the right strategy. Covers covered calls, cash-secured puts, vertical spreads, iron condors, and LEAPS. Free version — upgrade for Greeks management, IV rank guidance, position sizing, and full adjustment playbooks. author: OpenClaw Skills tags: [options, trading, derivatives, income, spreads, free] metadata: emoji: 🎯 requires: tools: [web_search] os: [linux, darwin, win32] --- # Options Strategies Lite > *"Options are about probabilities, not predictions."* **⚙️ Want Greeks management, IV rank guidance, and full adjustment playbooks?** **Full version → [agentofalpha.com](https://agentofalpha.com)** --- ## What This Skill Does Helps you pick the right options strategy for your market outlook and explains exactly how each of the 5 most widely-used strategies works — in plain English, with P/L breakdowns. **Included in Lite:** - ✅ Strategy selector: Tell me bullish / bearish / neutral → get the right strategy - ✅ Plain-English breakdown of 5 core strategies - ✅ Max profit, max loss, and breakeven for each - ✅ Honest "best for" and "avoid when" guidance **Upgrade to Full for:** - ❌ Greeks management (Delta, Theta, Vega — how to hedge and size) - ❌ IV Rank guidance (when to buy vs. sell premium based on volatility environment) - ❌ Position sizing rules (how much capital to risk per trade) - ❌ DTE optimization (optimal days to expiration for each strategy) - ❌ Real-world adjustment playbooks (what to do when a trade goes against you) - ❌ Advanced strategies (butterflies, calendars, diagonals, jade lizards, BWBs) - ❌ Exit criteria and take-profit rules --- ## Strategy Selector Tell me your outlook and I'll point you to the right strategy: ### Bullish Outlook | Your Situation | Strategy | |---------------|---------| | Strongly bullish, want leverage, defined risk | **Long Call** | | Moderately bullish, want to reduce cost | **Bull Call Spread (Debit)** | | Moderately bullish, prefer to collect premium | **Bull Put Spread (Credit)** | | Happy to own the stock at a lower price | **Cash-Secured Put** | | Already own the stock, neutral to slightly up | **Covered Call** | | Want stock-like exposure with less capital | **LEAPS Call** | ### Bearish Outlook | Your Situation | Strategy | |---------------|---------| | Strongly bearish, want leverage, defined risk | **Long Put** | | Moderately bearish, reduce cost | **Bear Put Spread (Debit)** | | Moderately bearish, collect premium | **Bear Call Spread (Credit)** | | Own stock, want downside protection | **Protective Put** | ### Neutral / Range-Bound Outlook | Your Situation | Strategy | |---------------|---------| | Stock going nowhere, want to profit from it | **Iron Condor** | | Already own the stock, don't expect big moves | **Covered Call** | | Expect low volatility, tight range | **Iron Butterfly** (full version) | ### Unknown Direction (Volatility Play) | Your Situation | Strategy | |---------------|---------| | Big move expected, don't know which way | **Long Straddle** | | Same but want cheaper entry | **Long Strangle** | --- ## The 5 Core Strategies — Plain English --- ### 1. Covered Call **What it is:** You own 100 shares and sell someone the right to buy them from you at a higher price. They pay you premium upfront. **The deal:** You cap your upside at the strike price, but collect income whether the stock goes up, stays flat, or drops a little. **Example (stock at $100):** - Sell 1 call at $110 strike, collect $2.50 premium - Your income: $250 (received now, regardless of what happens) - Max profit: $1,000 (stock appreciation from $100 to $110) + $250 premium = $1,250 - Max loss: You still own the stock — loss is whatever the stock falls minus the $250 cushion | Metric | Value | |--------|-------| | Max Profit | (Strike - stock cost) + premium | | Max Loss | Stock drops to zero (minus premium received) | | Breakeven | Your purchase price minus premium | | Upside | Capped at strike | **Best for:** Income generation on stocks you already own. Neutral to mildly bullish outlook. **Avoid when:** You think the stock is about to rip higher — you'll miss the gains. --- ### 2. Cash-Secured Put **What it is:** You sell someone the right to sell their shares TO you at a specific price. You collect premium upfront and hold cash in reserve equal to the potential purchase price. **The deal:** Either you keep the premium (stock stays above strike), or you end up buying the stock at the strike — at a discount to where it was when you sold the put. **Example (stock at $100):** - Sell 1 put at $95 strike, collect $3.00 premium - Your income: $300 (received now) - If stock stays above $95: keep the $300, trade done - If stock drops to $90 at expiry: you buy 100 shares at $95 (your effective cost = $92 after premium) | Metric | Value | |--------|-------| | Max Profit | Premium received | | Max Loss | (Strike - premium) × 100 if stock goes to zero | | Breakeven | Strike minus premium | | Assignment | You buy the stock at the strike if it closes below | **Best for:** Getting paid to potentially buy a stock you want to own anyway at a lower price. **Avoid when:** You don't actually want to own the stock. Assignment is real — be prepared for it. --- ### 3. Vertical Spread (Bull Call Spread / Bear Put Spread) **What it is:** You buy one option and sell another at a different strike (same expiry). The sold option reduces your cost but caps your max profit. **Bull Call Spread Example (stock at $100, bullish):** - Buy $100 call + Sell $110 call, same expiry - Net cost: $3.50 (debit) - Max profit: $10 wide spread minus $3.50 cost = **$6.50** per share ($650 per contract) - Max loss: $3.50 per share ($350 per contract) — you can never lose more than what you paid | Metric | Bull Call Spread | Bear Put Spread | |--------|-----------------|-----------------| | Cost | Debit (you pay) | Debit (you pay) | | Max Profit | Spread width minus debit | Spread width minus debit | | Max Loss | Debit paid | Debit paid | | Breakeven | Lower strike + debit | Higher strike minus debit | **Best for:** Directional trades when you want defined risk but don't want to pay full option premium. **Advantage over long calls/puts:** Much cheaper. IV crush hurts less. Breakeven is lower. **Trade-off:** You cap your gains. If the stock goes to $150, you still only profit to $110. --- ### 4. Iron Condor **What it is:** You sell an OTM call spread AND an OTM put spread on the same stock, same expiry. You collect premium from both sides and profit if the stock stays in a range. **Example (stock at $100):** - Sell $115 call / Buy $120 call (bear call spread) = collect $1.00 - Sell $85 put / Buy $80 put (bull put spread) = collect $1.50 - Total credit: $2.50 - You profit if stock stays between $85 and $115 at expiry - Max profit: $250 per contract (keep all premium) - Max loss: $250 per side ($500 max on the losing spread, minus $250 credit = $250 net max loss) | Metric | Value | |--------|-------| | Max Profit | Total credit received | | Max Loss | Spread width minus total credit (per side) | | Profit zone | Between your two short strikes | | Breakevens | Short put strike minus credit AND short call strike plus credit | **Best for:** Range-bound stocks during low-volatility or stable periods. **Avoid when:** Big news or earnings are coming up. Binary events can blow past your wings. **Key insight:** You don't need to predict direction — you just need the stock to stay in a range. That's why this is popular with income traders. --- ### 5. LEAPS (Long-Term Equity Anticipation Securities) **What it is:** A call or put option with an expiration date 12-24 months away. Because of the long duration, these move almost like owning the stock — but at a fraction of the cost. **Example (stock at $100, very bullish):** - Buy 1 LEAPS call, $90 strike, 18 months out, for $18.00 - Cost: $1,800 (vs. $10,000 to buy 100 shares) - If stock goes to $140 in 18 months: - Stock gain: $4,000 (40%) - LEAPS gain: ~$3,200+ (option moves from $18 to ~$50) = **~175%** return on the premium | Metric | Value | |--------|-------| | Max Profit | Effectively unlimited (stock moves a lot in your favor) | | Max Loss | Premium paid (you can lose 100% if you're wrong) | | Breakeven | Strike + premium paid | | Leverage | ~5-7× leverage vs. owning stock outright | **Best for:** Strong multi-month conviction plays. Capital-efficient alternative to buying 100 shares. **Avoid when:** You need the stock to move quickly — LEAPS give you time, but you're paying for it. **Key risk:** If the stock doesn't move much, time decay still erodes value — just slowly. --- ## Quick Vocabulary | Term | Plain English | |------|--------------| | Call option | Right to BUY shares at the strike price | | Put option | Right to SELL shares at the strike price | | Strike price | The locked-in price in the contract | | Premium | What you pay (or collect) for the option | | Expiration | When the option contract ends | | In-the-money (ITM) | Option has intrinsic value right now | | Out-of-the-money (OTM) | Option would not be profitable if expired today | | Assignment | Being forced to buy/sell stock because your option was exercised | | DTE | Days to expiration | --- ## Where the Lite Version Ends You now know how to pick a strategy and what the basic mechanics are for the 5 most important strategies in options trading. **What you won't get here:** - **Greeks**: How to read Delta (directional exposure), Theta (time decay per day), Vega (sensitivity to volatility changes) — essential for managing positions - **IV Rank guidance**: The single most important factor in whether to buy or sell premium. High IV = sell premium. Low IV = buy premium. The full version scores this for you. - **Position sizing**: How much capital to risk per trade (and why most people risk too much on undefined-risk strategies) - **DTE optimization**: Each strategy has an optimal entry and exit window — entering too early or too late kills returns - **Adjustment playbooks**: What to actually do when an iron condor gets tested, or a covered call goes deep ITM - **Advanced strategies**: Calendars, diagonals, butterflies, the jade lizard, broken wing butterfly Options edge lives in the details. The full version covers all of it. **⚙️ Want Greeks management, IV rank guidance, and full adjustment playbooks?** **Full version → [agentofalpha.com](https://agentofalpha.com)** --- ## Example Queries - `"I'm bullish on AAPL — what's the best options strategy?"` - `"Explain how a covered call works in plain English"` - `"What's an iron condor and when should I use it?"` - `"I want to own MSFT at a lower price — what should I do?"` - `"What's the difference between a covered call and a cash-secured put?"` - `"I think TSLA is going to move big but I don't know which way"` --- *Options trading involves significant risk and is not suitable for all investors. This is educational content only — not investment advice. Always understand the full risk of a strategy before trading.*


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