| Buy Call | Bullish: Profit from a big price increase with limited risk. | Stock Price > Strike Price *(ITM)* | Profitable | Sell to Close to take cash profit, OR let your broker automatically buy the 100 shares. |
| Buy Call | Bullish: Profit from a big price increase with limited risk. | Stock Price < Strike Price *(OTM)* | Worthless | Do nothing. The contract expires. You lose only your upfront premium. |
| Buy Put | Bearish: Profit from a price drop, or hedge/insure shares you own. | Stock Price < Strike Price *(ITM)* | Profitable | Sell to Close to take cash profit, OR let your broker automatically sell the 100 shares. |
| Buy Put | Bearish: Profit from a price drop, or hedge/insure shares you own. | Stock Price > Strike Price *(OTM)* | Worthless | Do nothing. The contract expires. You lose only your upfront premium. |
| Sell Call | Neutral/Bearish: Income generation (collect premium) on flat or falling stock. | Stock Price > Strike Price *(ITM)* | Loss | Buy to Close early to minimize damage, OR get assigned (forced to sell 100 shares at strike price). |
| Sell Call | Neutral/Bearish: Income generation (collect premium) on flat or falling stock. | Stock Price < Strike Price *(OTM)* | Profitable | Do nothing. The contract expires worthless. You keep 100% of the upfront premium. |
| Sell Put | Neutral/Bullish: Income generation, or acquire stock at a lower desired price. | Stock Price < Strike Price *(ITM)* | Loss | Buy to Close early to minimize damage, OR get assigned (forced to buy 100 shares at strike price). |
| Sell Put | Neutral/Bullish: Income generation, or acquire stock at a lower desired price. | Stock Price > Strike Price *(OTM)* | Profitable | Do nothing. The contract expires worthless. You keep 100% of the upfront premium. |