Options Strategies Explained

Beginner-friendly explanations of the options strategies Tiblio supports.

This page explains the core options strategies that Tiblio's screener identifies. Each strategy includes what it is, when to use it, and what the risk profile looks like.

Cash-Secured Put

What it is: You sell a put option and set aside enough cash to buy the stock if assigned.

When to use it: When you're bullish or neutral on a stock and willing to buy it at the strike price. You collect premium while waiting.

Max profit: The premium received.

Max loss: Strike price × 100 − premium received (if the stock goes to zero).

Example: Sell 1 AAPL $180 put for $3.00 premium. You collect $300. If AAPL stays above $180 at expiration, you keep the $300. If it drops below $180, you buy 100 shares at $180 but your effective cost is $177 (strike minus premium).

Tiblio screen: Puts tab

Covered Call

What it is: You own 100 shares of a stock and sell a call option against them.

When to use it: When you're neutral to slightly bullish and want to generate income on shares you already hold.

Max profit: Premium received + (call strike − stock purchase price) × 100.

Max loss: Stock drops to zero minus premium received (same risk as owning the stock, slightly reduced by premium).

Example: You own 100 shares of MSFT at $400. Sell 1 MSFT $420 call for $5.00. You collect $500. If MSFT stays below $420, you keep the shares and the premium. If it rises above $420, your shares get called away at $420 — you profit $2,000 on the shares plus $500 in premium.

Tiblio screen: Calls tab

Bull Put Spread (Vertical Spread)

What it is: You sell a put at a higher strike and buy a put at a lower strike. Both same expiration.

When to use it: When you're bullish or neutral and want defined risk with lower margin requirements than a cash-secured put.

Max profit: Net premium received.

Max loss: (Width between strikes × 100) − premium received.

Example: Sell 1 SPY $540 put for $4.00, buy 1 SPY $535 put for $2.00. Net credit: $2.00 ($200). Max loss: ($5 width × 100) − $200 = $300. If SPY stays above $540, you keep $200. If it drops below $535, you lose $300.

Tiblio screen: Spreads tab

Bear Call Spread (Vertical Spread)

What it is: You sell a call at a lower strike and buy a call at a higher strike. Both same expiration.

When to use it: When you're bearish or neutral and want defined risk.

Max profit: Net premium received.

Max loss: (Width between strikes × 100) − premium received.

Caution: Avoid near earnings — a gap up can move the stock through both strikes quickly.

Tiblio screen: Spreads tab

Straddle (Short)

What it is: You sell both a put and a call at the same strike price and expiration.

When to use it: When you expect the stock to stay near the current price. Typically used for vol crush plays around earnings.

Max profit: Total premium received from both legs.

Max loss: Theoretically unlimited (stock can gap in either direction).

Risk level: High. Best for experienced traders who understand position sizing.

Tiblio screen: Vol Crush tab

Strangle (Short)

What it is: You sell an out-of-the-money put and an out-of-the-money call, both at the same expiration.

When to use it: Similar to a straddle but more forgiving — the stock has a wider range where you profit.

Max profit: Total premium received from both legs.

Max loss: Theoretically unlimited, but the breakeven range is wider than a straddle.

Example: Stock at $100. Sell $95 put for $2.00, sell $105 call for $2.00. Collect $400 total. Profitable as long as the stock stays between $91 and $109 at expiration.