---
title: '10 Options Strategies for 2026 (From Low Risk to Aggressive)'
source: 'https://youtube.com/watch?v=N-hULJjZZb0'
video_id: 'N-hULJjZZb0'
date: 2026-08-05
duration_sec: 2738
---

# 10 Options Strategies for 2026 (From Low Risk to Aggressive)

> Source: [10 Options Strategies for 2026 (From Low Risk to Aggressive)](https://youtube.com/watch?v=N-hULJjZZb0)

## Summary

This video from Theta Profits compiles ten options trading strategies for 2026, ranging from aggressive zero DTE day trades to conservative long-term income approaches. Each strategy is summarized with key excerpts from expert interviews, emphasizing structure, discipline, and defined risk.

### Key Points

- **Goal Setting and Strategy Overview** [00:02] — The video's goal is to present 10 options strategies for 2026, categorized by time horizon: zero DTE/day trading, medium-term (1-2 weeks), and long-term (weeks-months).
- **Zero DTE Strategies Introduction** [02:36] — Zero DTE trades are opened and closed same day, typically on S&P, with defined risk and no overnight exposure. They require focus and risk management.
- **MEIC Strategy** [03:08] — Multiple Entries and Iron Condors (MEIC) involves entering multiple small iron condors throughout the day, managing each side independently with tight stops. Tammy Chambles presented this, aiming for low drawdowns.
- **Zero DTE Iron Fly** [05:58] — Doc's iron fly places short call and put at same strike near market price, with wings based on expected move. Entered ~30 min after open, closed within 15-30 min. Average hold time ~18 minutes.
- **Levitation Strategy** [10:10] — Boomerang's levitation starts with an ATM credit spread and manages it intraday to move the position above zero on the risk graph, making it risk-free. Can be repeated multiple times.
- **Medium-Term Strategies Introduction** [13:35] — These strategies are held 1-2 weeks, requiring fewer intraday decisions. First up: time flies and flyagonal.
- **Time Flies and Flyagonal** [14:04] — Simon Black and Steve Gans present similar strategies combining a put diagonal below market and a call broken wing butterfly above. They benefit from time decay and volatility behavior.
- **Rolling Put Diagonal** [18:01] — Bill Belt's strategy involves selling short-dated puts for income while using a longer-dated put for protection. It's rolled repeatedly, focusing on capital efficiency.
- **Double Calendar** [22:47] — Ravish Auya's range-based strategy uses put and call calendars with different expirations. It benefits from volatility increases and has a wide profit zone.
- **Long-Term Strategies Introduction** [28:44] — These strategies are held for weeks or months. First is the wheel, a well-known income strategy.
- **The Wheel** [29:00] — Paul Gunderson's version alternates between selling cash-secured puts and covered calls. It's process-driven, suitable for busy people, and yields 15-18% annually.
- **21 DTE Put Broken Wing Butterfly** [32:22] — Carl Allen's strategy is a bullish, high-probability trade (wins ~80%) with defined risk. It's entered ~21 days to expiration and requires minimal management.
- **Selling Far OTM Puts** [36:52] — Lee Lavel's conservative approach sells puts at least 20% below stock price, 1-3 months out, targeting small premiums (25-30 cents) for high probability of success.
- **No-Loss at Expiration Framework** [40:03] — Kavistian Sherich presents a framework using options pricing and interest rates to create trades with no loss at expiration, prioritizing capital preservation.

### Conclusion

The video emphasizes that successful options trading relies on structure, discipline, and defined risk, regardless of time horizon. Each strategy offers a different balance of risk and reward, and viewers are encouraged to research and choose what fits their style.

## Transcript

So my goal for the year is 100% return. >> The risk of ours is very low. My goal is to get in, get my fair share, and to get out. >> I can just close the laptop and walk away knowing that no matter what, uh,
the trade is going to be a winner. >> And now I'm safe. >> It is not unreasonable to get between 15 and 30% a month. >> If I were to just trade double calendar in an account, I can make well over 100%
annually. The wheel strategy has produced very consistent income for me. >> It's a very high probability trade, so it wins about 80% of the time. >> One of the best things about zero DTE options is no overnight risk.
>> One of the most common questions I get is which options trading strategies is which options trading strategies makes most sense right now? Throughout 2025, I've interviewed a wide range of
experienced retail options traders and options experts here on Theta Profits. In those conversations, we have covered dozens of strategies, some conservative,
some more aggressive, all focused on one goal, using options all focused on one goal, using options in a smart, repeatable way. I put together 10 great options strategies to consider for 2026.
All of them have been covered in full here on Theta Profits. I'll briefly summarize the strategy, explain why it might make sense in 2026, and then let you hear directly from the
guest with key excerpts from the original conversation. If any strategy resonates with you, you'll find a link in the description to the full interview where we go much deeper into the details, the risks, and how the guest
actually trades it. I have structured this video into three main segments based on time horizon. First, we will look at three zero DTE or
day trading strategies. Then we'll move into three and mediumterm strategies typically held for one or two weeks. And finally, we'll finish with four long-term strategies designed to be held for weeks or months. We'll start with
the most active part of the spectrum, zero DTE and day trading strategies. These trades are opened and closed on the same day, typically on S&P with
clearly defined risk and no overnight exposure. Zero DT trading isn't for everyone. But for traders who can focus during the trading day and know how to manage the risk, these strategies can be very
powerful. The first strategy I want to highlight is MEIC, multiple entries and highlight is MEIC, multiple entries and iron condors. This is a zero DTE SPX strategy where you enter multiple small iron condors throughout the day instead
of one large position. Each side is managed independently using very tight stop- losses. And the key feature of the strategy is that if only one side is stopped out, the trade often ends up near break even instead of
a full loss. This approach was presented by Tammy Chambles who has traded and by Tammy Chambles who has traded and refined MEIC live for years and I might say that my own breadandut strategy zero DTE break even condor is very close to
MEIC. So I'm going to talk about multiple entry iron condors and I have my goal for trading options no matter what strategy is a good annual return and low drawd downs. I just don't like the psychological effect of of high draw
down. So I really aim for low draw downs. And the MEIC rules that I use are legging into an iron condor uh multiple times a day using zero DTE options on
times a day using zero DTE options on S&P. Uh I enter six trades each day at about 30 to 60 minutes apart generally in the late morning through afternoon. My credit targets lately I've reduced them because of the lower volatility
them because of the lower volatility generally from one to a dollar to $1.75 credit on each side. You can use other credits uh if you want, but the the higher the credit, the larger the draw downs that I've found in my experience.
downs that I've found in my experience. And then I use uh from 50 wide to to anywhere from 50 to 60 wide on average to all the way up to 100 wide uh because I want to pay as little as possible for that long leg. You can use any width of
spread that works for you. you know, back test it to make sure it's going to work the way you think it's going to work. Then I set a stop for a oneex net lost, which which is two times the initial credit. And I set that stop on
each side separately. I don't set it on the whole iron condor. So management, I enter and manage each side separately, and I leave all trades on until either they hit the stop or expire worthless. And because MEIC has a clear set of
rules, it can be easily automated. >> MEIC is a good example of a zero DTE strategy that prioritizes structure, consistency, and draw down control over
excitement. If you want the full breakdown of rules, automation, and back testing, you'll find a link to the complete interview with Tammy in the description. The second strategy is stock's zero DTE
iron fly. This is a same day S&P trade where the short call and the short put are placed at the same strike near the current at the same strike near the current market price with defined risk wings
market price with defined risk wings based on the expected move. The trade is usually entered around 30 minutes after the market opens and is designed to be the market opens and is designed to be closed very quickly. typically within 15
to 30 minutes. >> That to me was almost like the holy >> That to me was almost like the holy grail of zero DTE trades. My average whole time is about 18 minutes. John, my goal is to get in, get my fair share,
and to get out because to me, time is money. An ironfly is an iron condor. So, I think most of your listeners are aware of what an iron condor is. You have a
put credit spread married to a call credit spread. >> And to be clear, an ironfly is basically an iron condor where the two shorts are on the same strike. Correct. >> Strike. Yeah. The put, the short put and
call are at the same strike price. Bringing them in actually is sort of counterintuitive. Bringing in the wings, so you're making the trade more narrow is counterintuitive to most people.
Their first question is, well, you know, doc, why would you make the trade more narrow? Doesn't that it makes no sense to me? Well, it's it's really good from a couple of of perspectives here. So number one, by making the trade more
narrow, reducing your profitability range does one very very wonderful thing, which is to speed up the trade significantly. So versus a a wide wide
iron condor where you have to wait the majority of the day to realize your very majority of the day to realize your very small profits by putting them closer in you get much bigger credits and the time decay is much much faster. So that's one
of the big advantages is speed of the trade, which is something that's very important to me now because I don't want to be spending all day long staring at a screen, you know, wondering how a trade is working out. The second thing that's
a real big advantage is just the reward to risk on the trade. When you have wide high probability iron condors, your reward to risk is usually very poor. Your probabilities are high, but your reward to risk is very poor. So it then
falls upon you to be very very disciplined with your stop- losses as everything is right. But by bringing in the trade, by making it more narrow, you
significantly improve your reward to risk and you make it a much more risk and you make it a much more manageable trade such that if you were not able to watch the market or didn't have to watch the market all day long,
that is a a possibility that you could pursue. Now let's move into what happens when the trade goes against you because this is a fastmoving uh trade both when it comes to taking profit but I guess also when it comes to getting into
negative territory if the market doesn't move your way. What are your exact rules stop-loss? tells me what to do. Right. So what I'll do is I'll I'll enter the expected moves
into that. So an expected move figure and then I'll enter the entry point of that. So say it's 6850 and the example for today that we had
and the example for today that we had with a 29 point expected move. My stop with a 29 point expected move. My stop losses would be at 68.21 21 and 6879. And so if the price comes down to there,
boom, I'm out. >> The ironfly is all about speed and >> The ironfly is all about speed and discipline. It replaces prediction with execution. The full interview with Doc is linked below.
The third zero DTE strategy is Boomerang's levitation strategy. This approach typically starts with an at the money credit spreads and is
actively managed intraday with the goal of moving the entire position above the zero line on the risk graph making it effectively risk-free. The same process can be repeated multiple times throughout the day. The
whole goal behind this trade is to create a zero DTE trade. It could be used with other option expiration lengths as well like one day out, week, month, whatever. But I'm using the zero DTE trade. So my goal is to take a zero
DTE trade. So my goal is to take a zero DTE trade on the S&P and maneuver it, manage it in such a way to get to make the trade completely risk-free as >> I'm really curious how you how you do that because this must be a dream
situation to be in at the end at the end of the day. Yeah, once you once you get it in, it is a dream. However, it's important to realize that you don't but with these trades and everything
some initial risk at the beginning, but the goal is to eliminate that risk as thing floating up above the zero line on the risk graph. Now, the way that I put these on is I I start with an at the money credit spread. I sell an at the
money credit spread, and this is on the S&P. It's important to to know that you need to these trades won't necessarily work on anything other than cash settled indexes or you could but you have to get out of them at the end of the day. The
so you don't have to worry about assignment and you know having to make the day. You can let these just go into the night. So it's at the money and the pricing on this is 255 which is usually what you'll get.
fudge and go up a little bit or outside I want to try to get 250 or better. So, it's a 1:1 riskreward ratio. I'm going minutes. And you can see we've moved into the tent. This trade is up 130
140ish bucks. And so, what I'm going to do now is I'm just going to complete the other side of this. I'm going to turn this into a butterfly. So, I'm going to So, I'm going to buy a debit spread with the short at the exact same spot there,
butterfly. >> And now, this butterfly uh will always make money. And this happens because you were already moved the the put credit spread into the profit. So, you use this profit, you lock in some profit. Is that
>> Yes, that's exactly correct. I think the strategy is probably for an intermediate options trader who understands credit spreads and butterflies. Uh as long as
put on a credit spread and they understand that they need some sort of a hedge if they want to hedge it and they're somewhat nimble with being with uh actually making the trades on their platform. I mean, it's not going to be
like a fire alarm. You have time with this. It's not super stressful, but you should have the ability to uh be comfortable opening and closing trades. So, I'd say an inter intermediate options trader.
>> Limitation is very hands-on and very different from most zero DT strategies. The full interview with Boomeran is of course linked below.
Those were the three very active zero DTE strategies. Now, let's slow things down. The next three strategies move into a mediumterm horizon typically held for one to two weeks requiring fewer inday
decisions. The first strategy is actually two very similar strategies time flies and flyagonal. They were presented by Simon
Black and Steve Gans. Both combine a put diagonal below the market and a cold broken win butterfly above the market designed to benefit above the market designed to benefit from time decay and volatility behavior.
In short, the put diagonal will benefit from increased volatility which typically happens when the market drops. The cold broken wing butterfly will benefit from decreasing volatility which
typically happens when the market grinds upwards. They also have about the same time frame about 10 days. Where they differ a bit are on the mechanics that two traders use.
>> If we go up and volatility drops, the butterfly is making money for me. If the market goes down and volatility increases, the diagonal is making money >> So, this strategy is my attempt to try to make the most of theta decay while
staying delta neutral like a lot of traders like to do. Um but at the same time uh hopefully manage volatility contraction and and expansion you know and trying to make them basically trying to cover all our bases with the market
uh moves and these trades I try to do are weekly trades trying to be delta are weekly trades trying to be delta neutral theta positive Vega positive I of a play on words there because obviously theta decay is all about time
obviously theta decay is all about time flying by but also um there's a there's component which is a time sort of trade and there's also a butterfly component. and there's also a butterfly component. I'm trying to combine a put
I'm trying to combine a put diagonal below the market price and a call broken wing butterfly above the price. So you sort of have to understand diagonals or calendars which are very similar trades and butterflies and
that's the two components to understand. As we know um volatility and market drops sort of go hand in hand, right? when when some big news is announced and when when some big news is announced and the market dumps 5%. V spikes, you you
hardly ever see the market dump and the V go down, right? It's sort of that correlation, right? The markets don't crash up, right? They they crash down. So, what would happen if the market did make a big 3% move, what happens is
volatility spikes. So, what you'll see if if I start sliding the V slider up, you'll see that the overall temp gets wider, right? So it's almost like this buffer where you're playing for a downsized move, but when you get a down
size move, the tent gets wider. So even even if it moves further than you thought, it's you know what it's it's compensating for that. >> The 42nd version is that I have developed trading classes in both
butterflies and diagonals. And as I was doing that, I realized that they each have weaknesses. But if I combine the two together, it gets rid of a lot of the weaknesses. So I put those two together in a strategy I
call the flag. Expirations, I'm normally going about 8 to 10 days is where I'm normally at. The short strike is 8 to 10 days out. The long strike, I usually go
about double whatever the short strike is. So if my short strike is 8 to 10 days out, my long strike is going to be 16 to 20. The average holding time is about 4 and a half days. I'm shooting for 10%. But I also have a general rule
for 10%. But I also have a general rule about when I have to adjust a trade. I lower my expectations. Strategy is certainly best suited for somebody that has made options trades before. This is not something that a beginner is going
to come in and they haven't even done an iron condor yet and they step into this. Not not where they should be starting. Whether it's called time flies or fly, the idea is the same structural balance. Both full interviews are of course
linked in the description. The fifth strategy is the rolling put diagonal, a medium-term income strategy that sits right between short-term trading and long-term trading. At its core, this strategy is about
consistently selling shortdated puts for income while using a longerdated put as protection and to manage the buying power. Instead of closing the position after one cycle, the short put is rolled again and again or follow allowing time
decay and small directional moves to do most of the work. This strategy was presented by Bill Belt, who has refined the rolling put diagonal into a very rules-based repeatable income approach with a strong focus on capital
efficiency and risk management. Let's start with how Bill explains what the rolling put diagonal actually is. Yeah, the the rolling put diagonal has been a very successful strategy for me because it combines flexibility with
options and and what I believe is a pretty high rate of return or yield on on the margin or buying power that I'm using.
Some people call this a short put diagonal. Some people call it a credit diagonal. But at the end of the day, diagonal. But at the end of the day, it's basically a spread that is a hybrid
between a calendar spread and a vertical spread. So, as a result, you have two spread. So, as a result, you have two legs. One leg being your income leg and legs. One leg being your income leg and your long leg which is further out of
the money in the put side being your protection or being your buying power protection or being your buying power management. The goal is income. what I management. The goal is income. what I am doing basically
probably about 15 to 35 or 40% 15 to 35 or 40% per month of return on investment you're using in the months. >> Let's then think that you are opening a
new diagonal today. Okay. What what are the mechanics you will follow? Well, what I'm going to do basically is I'm going to sell to open tomorrow's at the
money strike price with tomorrow's expiration. expiration. >> And then I may look at 14 days to expiration or maybe 30 days to expiration.
expiration. Um, and I want to go to about a 30 to 35 delta. The rolling put diagonal is an income The rolling put diagonal is an income strategy that utilizes delta management.
What I want to do is to make sure that my short has a higher delta my short has a higher delta and the long has a lower delta. So as the depreciation goes into my pocket, I'm getting I'm
getting the income from the short leg. So, I may sell the current one for let's So, I may sell the current one for let's say a dollar and a half or $2 and I may buy the current one back at let's say a quarter or 50 cents. So, that
in between there is my profit >> and every day I will roll. So, and I >> and every day I will roll. So, and I will roll to either at the money or if the price has gone down I roll do a horizontal roll. What is the worst that
can happen with this strategy? >> The worst that can happen is the >> The worst that can happen is the difference between the short and the the difference between the short and the the long. So you basically are taking the
spread and saying my maximum loss could be x amount if the market is correct. In other words, you're not trying to force a square peg into a round hole. Um, so
if you doing it in a flat to a slightly bullish market, it's a lowrisk strategy. bullish market, it's a lowrisk strategy. If you are trying to put it into a declining market, it's a high risk because you're banking on the market
turning around. So the first thing is make sure your environment is the right environment. >> This is a processdriven strategy. The full interview with Bill is linked below. The sixth strategy and the final
one in our midterms section is the double calendar. This is a rangebased volatility aware strategy typically held for one to two weeks where you place a
put calendar below the market and a call calendar above the market. The result is a wide profit zone with defined risk driven by time decay and changes in
implied volatility. Compared to iron counters, the double calendar relies less on price precision and more on volatility behavior and it can actually
benefit if volatility increases after entry. This approach was uh presented by Ravish Auya who treats the double calendar as a campaign style trade with
clear rules around entries and exits. Let's start with how Ravish explains the core idea behind the strategy. So double calendar is a rangebased strategy. It is
like an iron condor, but with double calendar, we use different dates for both strikes. And that allows us to have a much wider range compared to an iron condor. And on top of that, with an iron condor, you are typically risking like
condor, you are typically risking like $80 to make $20 profit. But with double calendar, you can make well over 100% even in best case scenario. And your risk is smaller, but the payout is much bigger. There are two types of calendar.
bigger. There are two types of calendar. First one is a call calendar in which basically we will have two calls but both of them are going to be for both of them are going to be for different dates. So for example I can
sell one call I can buy one call for 27th of June and sell one call for 20th June. Let's start with an example of a single calendar on the at the money
single calendar on the at the money strike. It will give us a profit and loss curve kind of like this which resembles a butterfly. But the main difference between butterfly and calendar is that butterfly makes profit
when VIX goes down. Calendar makes profit when VIX goes up. And you can position these strikes at anywhere. So you can use calendar in three different ways. You can use it for a neutral trade. You can use it for a bullish
trade. You can also use it for a bearish trade. Now in a double calendar we like to combine both call calendar and a put calendar. In this case I am going to do
calendar. In this case I am going to do a 5900 put calendar and I'm going to do a 5900 put calendar and I'm going to do a 6100 strike call calendar. So now I have my strikes placed about approximately 100 point away from the
current price. Now this gives me a 71% chance of profit and it gives me a very chance of profit and it gives me a very wide break even curve where if S&P goes wide break even curve where if S&P goes up or down by 2.4% in these 10 days I
will make some profit. Now in this case I will not be making like 200% 300% I will not be making like 200% 300% profit because what's going to happen is if S&P goes up the call calendar is going to make profit and the put
calendar might end up at a break even or a small loss. If SPX goes down then put calendar is going to make a bigger profit and call calendar is going to be at a smaller loss. >> How will the profit loss curve look look
then? So profit and loss curve will look down. So let's say we start here today. If even if S&P stays flat day over day we are accumulating theta and the max profit is going to be somewhere in
between the both strikes but initially if you are through the trade like halfway through the trade the the curve is still going to be very smooth. The further you go near the expiry,
you will see that a sag starts to develop in the middle and the max profit range shifts to each strike. So by the end of expiry, you will make max profit if it ends up near the call
strike or the put strike and you will make smaller profit in the middle. So which is why I like to exit a few days before expiry while the curve is still smooth. So at this point anywhere between the expiry dates I can make some
between the expiry dates I can make some profit. So one big risk for double calendar strategy is that if VIX comes down then this trade is going to lose. So let's simulate that in in this profit and loss curve. So now here we see that
we have a very wide range of profit. But if VIX comes down then we see that in if VIX comes down then we see that in the middle of the range it will become a sea of red. So I am going to lose money if the trade is in middle of both
strikes. And in that case the only way to make money is going to be if S&P lands very close to one of the strike prices. But if VIX goes up then you see that my profit range expands very wide. It goes very wide and I can make profit
like anywhere. Even if it goes past my strike, I can still make profit if VIX goes up. The rule of thumb is that you want to enter when VIX is low and take profit when VIX is high. So, this strategy is ideal for someone who wants
strategy is ideal for someone who wants to amplify their returns, but they don't want to day trade, spend all day doing technical analysis, watching charts. If you want something with a reasonable riskreward where you have high win rate,
smaller losses, bigger wins, it's very consistent, it's ideal for someone like that. The double calendar is ideal for traders who understand volatility and
want flexibility. Now, we move to the final section, long-term strategies designed to be held for weeks or months. We'll start the long-term section with one of the most well-known options
income strategies, the wheel. At its core, the wheel alternates between selling cash secured puts to enter the stock positions and selling covered calls once shares are assigned with a goal of generating steady income over
time. Trades are typically held for weeks or months, and the strategy works best for traders who are comfortable owning quality stocks. This version of the wheel was presented by Paul Gunderson,
who emphasizes treating it as a process driven long-term income strategy rather than a way to chase premium or short-term gains. The wheel is
especially well suited for traders who want a slower pace, limited screen time, and a strategy that can be run consistently along a normal life. Let's start with how Paul explains the wheel at the high level. My version of the
wheel is simple. I follow the process, which is essentially three steps. research. There is uh to determine what stocks I'd like to own and then there's a process called the cash secured put at the top of the wheel, a covered call at
about this as we go. And then the only other thing I'd say is I like what I other thing I'd say is I like what I call sci-fi trades. set it and for and my version of sci-fi is that I will spend about 15 minutes in the morning
you know after the market opens and then about 15 minutes in the afternoon adjusting my trades making new trades and that's it for me at a high level the wheel strategy has produced very consistent income for me which is
important to many people that that they need that consistent income I'd say in need that consistent income I'd say in general 12 to 15% from the wheel per year and then an additional 3% in dividend income generally. So I'm
getting between 15 and 18%. >> I always ask my guests what is the worst that can happen with this strategy? >> Well, I think the worst is that uh at the top of the wheel where we're selling the cash secured but we don't own the
stock yet is you can be assigned a stock that is well below your strike price. If your strike price is 100, you could be assigned at 80 or 70 or 20 dollars a
share. So, uh that has happened to me, but you still end up owning the stock at the end of the road. And then you know that they they do recover many of them over time. In a few words, the wheel strategy lets you get paid while you
wait. So, if I'm waiting to buy a stock, I get paid and then I get paid again while I'm holding the stock. It's a it's a very steady it's a very repeatable
process and it puts you in great great control over your assets. To me, I would say it's suited for busy people. It's suited for sci-fi, set it and forget it
people who are busy who but they want to bring in income and they don't have a >> And of course, a link to the full interview with Paul can be found in the description. The next strategy is the 21DTE put broken wing butterfly. This is
a longerdated defined risk strategy typically entered about 3 weeks to expiration and most often traded on index products like S&P. The structure
is designed to have no risk to the upside, limited and predefined risk to the downside and a high probability of success in neutral to moderately bullish markets. What makes this setup especially attractive is that it allows
traders to sell premium with structure without needing con adjustments or intraday management. This approach was presented by Carl Allen who focuses on keeping the strategy simple, rule-based and repeatable. Let's start with how
Carl explains the core idea behind the 21 DTE broken wing butterfly. The broken 21 DTE broken wing butterfly. The broken wing butterfly put strategy is a bullish strategy. It's a very high probability trade, so it wins about 80% of the time.
It's a defined risk strategy, so you don't have to worry about naked option risks. There's several different ways to manage it when it wins. There's a few different ways you can manage it if it loses. And it just it's a very easy to
set up and execute and just let it run and then close out for a profit. Let's let's start with a butterfly. People a lot of times think about butterflies as there's iron butterflies or iron flies and then there's also put butterflies.
But either way, the idea is you sell two options at the same strike and then you buy two options outside of those two. Typically, in mo when most people trade
butterflies, they're selling two two strikes in the middle and then they're buying two equally distant puts away from it to use as hedges to protect the
them from the the two shorts they're selling. The the issue with that is the only way you profit is if you stay in between the two long puts that you've between the two long puts that you've bought. And so you you're shooting for a
pretty narrow window. And your goal is to hit right between those as close to those two short puts as you can. The broken wing butterfly broken wing butterfly changes that by selling or buying one of
your puts much further away than the other one is. And so when you do that, you eliminate all the risk to one side. And so it's a broken wing butterfly because the the way that if you look at the at a
the the way that if you look at the at a butterfly profit diagram, it it looks imagination, you can think of it like a butterfly. Um when you break the wing, now the one
side is way lower than the other and it now it's a broken wing butterfly. So the little lines out, they're not even anymore. They're broken. I've chosen 21 days and I've chosen to set it up where the strikes are well out of the money.
And this came after lots and lots of trial and error, different kinds of strike choices and different expiration choices. The first thing I do is I turn around and set a close order for, in this case, if it's a 25 point wide one,
I'd set a close order for 50 cents. Good until cancel. For the most part, I just kind of set it and forget about it. It also might be a good time to think about setting up a bracket order and make it sell at 50 cents and then maybe set a
sell at 50 cents and then maybe set a stop loss to close it at maybe two times more than what you collected to start with. If you want to manage it that way, and bracket it so that you're either going to win or you're going to lose.
And if you get to all the way to seven days and you haven't won or lost, then it's probably time to take action at that point, too. So, I think this works well for people that want to do put a portion of their portfolio into
something that's a little more aggressive. And it also I think, you know, I've over time become a little more choiceful about when I decide to do more choiceful about when I decide to do this. So, I I'll do this a lot of times
put them on on a down day when the market's already gone down a little bit. >> That was Carl Allen. You find the link to the full interview with him in the description. The next strategy takes a
very conservative approach to long-term options income, selling far out of the money puts. This is a longerterm strategy typically using expirations from 1 to 3 months where the focus is not on collecting large premiums but on
not on collecting large premiums but on creating a wide margin for error by selling puts far below the current stock price. The goal is consistency and capital preservation rather than aggressive returns.
and the strategy works best on high quality stocks that the trader would be comfortable owning if assigned. This approach was presented by Lee Lavel who has built his entire trading philosophy around conservative put selling and risk
first decisionmaking. Let's start with how Lee explains why he prefers selling puts this way. Well, number one, we love selling put options. In my opinion, I think it's probably the greatest option trading strategy ever.
But the way that we do it, the way I teach people to sell put options in very conservative manner, we use very deep out of the money strike prices. Stocks here, we're selling put options way down here. And that's a good way for beginner
put option sellers to dip a toe into the strategy. So we're very conservative. We sell deep out of the money strikes. And you get smaller premiums for that, but to have a lot of cushion for directional error. You know, a lot of people are not
very good at picking stock direction. So if you can give yourself a lot of out of the money conservative put options can work very well for the understand the strategy a little better, once they get a little bit better at
reading chart direction, then they can up their game and get a little bit more risky with the strikes that they choose. You know, when you sell a put option, potentially buy a stock at a certain price. And you get to choose that strike
or that price of that stock. So you're really in control as a put option stock that you want to trade. You're getting to choose the potential level someone's going to pay you money up front for that obligation. I think it's
a win-win for everybody. Our criteria is the stock price is here. We're going at least 20% below that stock price for the strike price. So, we've got a 20% directional buffer. We're looking anywhere from one to three months out in
time as long as that fits within that earnings that non-earnings period. And we try to use the, you know, we're looking for small premiums or what someone would consider smaller 25 to 30 cents per contract. That's actually 25
$30 that you'd get in your pocket in a one month to three-month time frame. We typically can close the trade out in about 60 days. And so we use the shortest expiration we can find where we can get at least 25 to 30 cents per
contract and have a 20% buffer. The chance of assignment is extremely low. The strikes that we pick have roughly about a 95% probability stock's not going to fall that far. The option decays theta as you know and then we buy
the option back a lot cheaper and then our money gets released. We move on to the next trade. And yes, also the full interview with Lee is linked below. The final entry in this video is not a single strategy but a framework for
structuring trades so that they have no loss at expiration. These trades can experience draw downs while they're open. But if held to expiration, the open. But if held to expiration, the outcome is fixed, meaning there is no
outcome is fixed, meaning there is no risk of loss at expiration regardless of where the market ends up. This approach is built around options pricing relationships, interest rates, and synthetic positions, and is typically
applied to longer trades held for several weeks or months. This framework was presented by Kavistian Sherich and it represents a very different way of thinking about risk. One that prioritizes capital preservation over
short-term gains. I place this kind of trade trade and I say okay I switch off my computer and I will look at this tomorrow again. Fine. I know I'm safe. But it is
possible to set up a no loss trade at expiration where there is absolutely no risk to the downside. >> That's correct, John. Uh you can set up >> That's correct, John. Uh you can set up a spy trade which will show you no loss
at expiration. It may have draw downs during the trade but at expiration. This trade you see just now on the screen has no loss at expiration. The moment you
you do a debit trade, you get paid the fed funds rate. And if you do a credit trade nowadays, you pay the fed funds rate. If the interest you
earn on your debit during the time you hold the trade is enough or higher than the loss zone of your trade you're actually placing, then you have a no
risk or no loss trade at hand. simply because the interest rate you receive because the interest rate you receive over time lifts your trade out of the over time lifts your trade out of the loss zone. We have here Microsoft.
loss zone. We have here Microsoft. Microsoft is trading at 357.86 and I see Microsoft going back to the 400 420 area within the next 120 days,
130 days. This is an August trade. I don't know if Microsoft is paying a dividend within this time. If Microsoft has an X dividend date during that time, we will also receive dividend because we
we will also receive dividend because we are long stock. So that would be added to the $96 we have as a guaranteed profit in this trade. But why I'm looking at this or what's interesting, how is this trade
what's interesting, how is this trade developing? You enter this trade today developing? You enter this trade today and we have no profit in the trade. Now this trade is developing if the implied volatility stays as it is
if the implied volatility stays as it is like this. The moment the market goes up you will see a profit in the trade. Of course if you are simply long stock you would see more profit. On the other hand, if the market crashes further
because we have some new tariffs to deal with, this trade with, this trade will have a marginal loss of 100, 200, will have a marginal loss of 100, 200, maybe $300 per combo if IV goes up as
maybe $300 per combo if IV goes up as well. But overall, this T0 line is very, very flat. So, it will do you no harm if the market crashes. On the other hand, if the market goes up, your trade goes up.
Maybe not as fast and not as nice as if you had a simple long stock position, but you are protected. The thing is, you can only go broke if you lose money. You
can't go broke if you lose time. Of course, a time is money. I don't expect every trade I do to end outside of the wings. Still, some of my trades
will end outside of the wings because I've read the market wrong. It happens. I've read the market wrong. It happens. But then I at least receive 1% or 2% on But then I at least receive 1% or 2% on the invested capital instead of having a
loss. I'm 60 years old. I don't need huge returns within a day. Of course, I like huge returns within a day. Who wouldn't? But I know I will not have it.
I cannot do that every day, every day, every day. It's not possible. I like a every day. It's not possible. I like a consistency and I'm very happy to have a consistency and I'm very happy to have a 20% or 25% return per year. You find the
link to the full interview with Christian in the description. Those are Christian in the description. Those are 10 great option strategies or frameworks 10 great option strategies or frameworks to consider for 2026.
Of course, this is not financial advice. Do your own research. Trade at your own risk. From zero DD trading to long-term capital approaches, the common theme is structure, discipline, and define risk.
All full interviews are linked in the description.