Options Income Strategies Compared
The complete map of the income strategies a retail options trader actually runs — what each pays, what it costs, what it risks, and when to use it. Every strategy below links straight to its calculator and a plain-English explainer, so you can go from "which one?" to running the numbers in two clicks.
Prefer to be guided? Try the interactive Strategy Finder → Answer four quick questions — experience, goal, assignment comfort and risk — and get matched to a strategy plus its calculator. Or compare them yourself below.Compare the core strategies
| Strategy | Best for | Max profit | Max loss | Capital |
|---|---|---|---|---|
| Covered call | Holders harvesting income | Strike − cost basis + premium | Full stock downside, less premium | 100 shares per contract |
| Cash-secured put | Buyers paid to wait | Premium received | (Strike × 100) − premium if stock to zero | Strike × 100 per contract in cash |
| The wheel | Continuous income on one ticker | Premiums across cycles + stock gains | Full stock downside while holding shares | Largest put strike × 100 in cash |
| Credit spread (vertical) | Defined-risk premium selling | Net credit received | Strike width − credit | (Strike width × 100) − credit |
| Debit spread (vertical) | Directional bets with capped risk | Strike width − debit | Debit paid | Debit × 100 per contract |
Find your strategy by goal
Start from what you are trying to do.
| If you want to… | Use | Start |
|---|---|---|
| Earn income on shares you already own | Covered call | Calculator · Learn |
| Get paid to buy a stock at a lower price | Cash-secured put | Calculator · Learn |
| Run continuous income on one stock you would own | The wheel | Calculator · Learn |
| Bullish, defined-risk income on far less capital | Bull put spread | Calculator · Learn |
| Covered-call income without owning 100 shares | Poor man's covered call | Calculator · Learn |
| Income while a stock stays range-bound | Iron condor | Calculator · Learn |
| Protect shares you hold from a fall | Protective put / collar | Calculator · Learn |
Core income strategies
The three trades this whole site is built around — start here.
Covered call
Sell one call against every 100 shares you own. Income that caps your upside at the strike; the downside is still the stock, cushioned only by the premium.
Calculate: Covered Call Calculator · Learn: What Is a Covered Call? · Go deeper: Covered Call vs Cash-Secured Put
Cash-secured put
Sell a put backed by the cash to buy 100 shares at the strike. You are paid to wait, and assigned the shares if it falls below — so only sell it on stocks you would happily own.
Calculate: Cash-Secured Put Calculator · Learn: What Is a Cash-Secured Put? · Go deeper: Best Stocks & ETFs for CSPs
The wheel
Cash-secured puts until assigned, then covered calls until called away, then repeat. Continuous income on one stock you are content to hold through a drawdown.
Calculate: Wheel Strategy Calculator · Learn: The Wheel Strategy Explained · Go deeper: Wheel vs Buy & Hold
Capital-efficient & defined-risk income
Same income idea, far less capital — by capping the downside with a long option.
Poor man's covered call
Buy a deep-in-the-money LEAPS call as a stock substitute and sell shorter-dated calls against it — covered-call-style income on a fraction of the capital.
Calculate: Poor Man's Covered Call Calculator · Learn: What Is a Poor Man's Covered Call? · Go deeper: Covered Call vs PMCC
Bull put spread
Sell a put and buy a lower-strike put for protection. A bullish, defined-risk credit trade: keep the credit above the short strike, with a capped loss below.
Calculate: Bull Put Spread Calculator · Learn: What Is a Bull Put Spread? · Go deeper: Cash-Secured Put vs Bull Put Spread
Call (vertical) spread
Two calls at different strikes. Buy the lower for a bullish debit spread, or sell the lower for a bearish credit spread — both with a known maximum loss.
Calculate: Call Spread Calculator · Learn: What Is a Call Spread?
Range-bound & neutral (defined risk)
For a stock you expect to go nowhere — sell premium on both sides with the risk capped.
Iron condor
Sell an out-of-the-money put spread and call spread at once. Profits if the stock stays between the short strikes; the wings cap the risk on both sides.
Calculate: Iron Condor Calculator · Learn: What Is an Iron Condor? · Go deeper: Iron Condors vs Strangles
Iron butterfly
Sell a put and call at the same body strike for a large credit, with protective wings. A high-reward, lower-probability bet that the stock pins the body.
Calculate: Iron Butterfly Calculator · Learn: What Is an Iron Butterfly? · Go deeper: Iron Condor vs Iron Butterfly
Butterfly spread
Buy one lower and one upper option and sell two at the body. A cheap, defined-risk bet that the stock lands on a target price at expiration.
Calculate: Butterfly Spread Calculator · Learn: What Is a Butterfly Spread?
Calendar / diagonal spread
Sell a near-dated option and buy a longer-dated one at the same or a different strike. Profits from faster time decay on the short leg when the stock sits near the strike.
Calculate: Calendar Spread Calculator · Learn: What Is a Calendar Spread?
Protective & hedging
Not income trades — ways to cap the downside on stock you want to keep.
Protective put
Hold 100 shares and buy a put as insurance. Sets a hard floor under your losses while leaving all the upside open — for the cost of the premium.
Calculate: Protective Put Calculator · Learn: What Is a Protective Put?
Collar
A protective put financed by a covered call. Caps both your loss and your gain — cheap or even free downside protection on a position you want to keep.
Calculate: Collar Calculator · Learn: What Is a Collar? · Go deeper: Covered Call vs Collar
Capital efficiency
Defined-risk spreads sit at the capital-efficient end of the spectrum. Because a long option caps the loss, your broker only reserves the worst case as margin. For a credit spread (a bull put or bear call) that worst case is the strike width minus the credit; for a debit spread (a bull call or bear put) it is simply the debit you pay. Either way you tie up a fraction of what the equivalent cash-secured put — or 100 shares — would cost. Calendars and butterflies are cheaper still: the small net debit is the entire outlay and the most you can lose.
The trade-off is size. Less capital at risk means a smaller absolute premium, and on the credit side a hard ceiling at the strike width if the stock runs straight through it. At the other end, a cash-secured put and the wheel deliver the largest dollar premium per ticker but demand the most cash, while a poor man's covered call sits in between — covered-call-style income for the price of a LEAPS instead of 100 shares. Pick a balance you can actually run across a real account, not a theoretical one. For the exact dollar capital each strategy needs, see How Much Money Do You Need to Sell Options?
Risk profile at a glance
- Covered call & cash-secured put: identical risk shape at the same strike — put-call parity forces the math.
- The wheel: both of those legs in sequence, plus the directional risk of holding shares during the call leg.
- Spreads, condors & butterflies: both ends capped — defined risk, in exchange for less premium.
- Protective put & collar: a floor under the downside (the collar caps the upside too).
Neither approach is universally better — capital, conviction and tax treatment decide.
Explore the full cluster
- Best income strategies for beginners — a ranked recommendation of where to start, and what to skip.
- All calculators & tools — every strategy's calculator in one place.
- The guides hub — plain-English explainers grouped by the trader's journey.
- The Cash-Secured Puts course — a step-by-step path for beginners.
- Strategy Finder — answer a few questions and get pointed to a starting strategy.
- All strategy comparisons — the index of every head-to-head "X vs Y" page.
- Options glossary — every term defined.
Educational content only. Nothing here is financial advice. Options trading carries the risk of significant loss.