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# Options strategies

There are a total of 4 basic option strategies:

- Bought (
**long**)**call**option - Sold (
**short**)**call**option **Long put**option**Short put**option

Now, it’s time to move on to the next (and maybe the main) thing to understand options:

**payoff diagrams**. These are mathematical charts with a quirk:*x*axis is the asset’s price, and*y*denotes the user’s profit or loss. Let’s delve into those!A summary chart:

It’s paramount to say that anything that can be combined (say, peanut butter & jelly, or doing a short transaction on a call option — do you recall it being a sale of a right to buy the asset?) can be combined on a higher level; option positions are no exception. Positions with different option types, strike prices, expiration dates can be combined for an

**almost infinite amount of possibilities**— options trading is in essence like playing chess, art as much as a science: there’s an**optimal position for every situation.**A guide on complex option strategies, called

**spreads**(an individual position in a spread is called a**leg**— so legs should be spread wide, ahem, diversified!), for the interested can be found at O’Reillys Bible of Options strategies.Last modified 9mo ago