Option Strategies with Single Leg
There are only four possible option strategies which involve only one leg (a single option) - a long position or a short position in each of the two option types (call and put): See also list of option strategies with two, three, and four legs. **Long Call.** Long call is a bullish option strategy - there is theoretically unlimited profit when the underlying asset goes up and limited risk when it goes [more ...]
Option Strategies with Two Legs
The following is a list of all option strategies which consist of two legs. **The List.** **Typical Strategy Groups with Two Legs.** There are three main types of option strategies with two legs: spreads, combinations, and strategies which combine an option with a position in the underlying asset. **Option Spreads.** Option spreads represent the most common type of option strategies with two legs. [more ...]
Option Strategies with Three Legs
The following is a list of all option strategies which consist of three legs. **The List.** **Typical Strategy Groups with Three Legs.** Three main groups of strategies with three legs include ladders, call and put butterflies, and covered straddles and strangles. **Ladders.** Ladders are typical examples of three-legged strategies. They are like vertical spreads with an additional leg - usually out [more ...]
Option Strategies with Four Legs
The following is a list of all option strategies which consist of four legs. **The List.** **Typical Strategy Groups with Four Legs.** Four-leg strategies generally include all condors (call, put, iron), iron butterfly (but not call and put butterfly as those have three legs), box spreads, and double calendars/diagonals. Iron condor is probably the best known four-legged option strategy: **Risk Exposures [more ...]
Option Strategy Legs Explained
When talking about option strategies, you often hear the term "leg" or "legs". This page explains what a leg means, providing examples of option strategies with one, two, three, and four legs. **What Is a Leg in Option Strategies.** A leg is a single component of an option strategy - typically an option with a particular strike and expiration. An option strategy can be composed of one or more legs. [more ...]