In the Money
An option with intrinsic value — a call whose strike is below the current price, or a put whose strike is above it.
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Calendar Spreads
A calendar spread sells a near-dated option and buys a longer-dated one at the same strike, profiting from the faster decay of the near leg if price sits near the strike. This lesson builds call and put calendars, explains why they are long time-decay and long volatility, shows the curved payoff at the near expiry, covers the diagonal variation, and shows how to rehearse them in the Options Lab.
The Covered Call
The most popular income strategy: selling a call against 100 shares you already own to collect premium. How it pays off, the income-for-upside trade-off, the three outcomes, when it makes sense, and the risks it does — and does not — protect against.
The Butterfly Spread
The butterfly is a defined-risk, three-strike strategy that profits when the underlying finishes near a chosen central price. This lesson builds the long call and long put butterfly, shows the tent-shaped payoff, then covers the iron butterfly (its credit-based cousin) and the broken-wing butterfly (a skewed version that can be opened for a credit), with worked numbers and how to practise each in the Options Lab.
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