Strategy Templates Explained

When you reach the Stage step of an OOC, OPTOMON asks you to pick a strategy template — a pre-shaped trade structure with the legs, strike geometry, and exit rules already sketched out. You fill in the specifics (which strike, which expiration, how much size); the template ensures the shape of the trade is coherent.

OPTOMON ships five system templates. They cover the common ground: income-from-stock-you-own, get-paid-to-buy, defined-risk credit, range- bound neutral, and time-spread directional. You can build custom templates later, but these five are the starter set and they're what the screener results map to first.

The numbers in each section below are in plain English. Real max-loss / max-profit / breakeven math is rendered live by the Eval Workspace once you pick strikes; this article is the intuition layer.

1. Covered Call

You already own 100 shares of a stock and you sell one call above the current price. You collect the premium. If the stock stays below the strike at expiration, you keep both the shares and the premium. If it goes above, your shares get called away at the strike — you still make money, just less than if you'd just held.

When to use it. You're holding a long stock position you're willing to part with at a specific higher price, and IV is elevated enough that selling time premium is attractive. Classic income overlay.

• Max profit. Premium received + (strike − cost basis), in dollars.
• Max loss. The stock could go to zero. The premium cushions a small drop, but the position is still long the underlying.
• Breakeven. Cost basis of your shares − premium received.

2. Cash-Secured Put (CSP)

You set aside cash equal to 100 × strike and sell one put below the current price. You collect the premium. If the stock stays above the strike, the put expires worthless and you keep the premium. If it drops below, you're assigned — you buy the stock at the strike (using the cash you set aside), effectively buying it at a discount.

When to use it. You'd be happy to own the stock at the strike price anyway, and you're being paid to wait for it. IV elevation sweetens the deal. Often called the "get paid to set a limit-buy."

• Max profit. The premium received. That's it — capped.
• Max loss. Strike − premium received, times 100. (The stock can drop below the strike, and you still have to buy at strike.) In the worst case (stock at zero), this is large.
• Breakeven. Strike − premium received.

3. Vertical Credit Put Spread

You sell one put at a strike and buy another put at a lower strike (same expiration). You collect a net credit. The lower long put caps your downside. This is the CSP's defined-risk cousin.

When to use it. You're bullish-to-neutral, want CSP-style income without setting aside the full strike × 100 in cash, and want a hard floor on the loss. Lower capital, lower max profit, but the loss is bounded — no surprises.

• Max profit. The net credit received.
• Max loss. (Width of the spread − credit received) × 100. Fixed.
• Breakeven. Short strike − credit received.

4. Iron Condor

You sell a credit put spread and a credit call spread on the same underlying, same expiration. You collect two premiums. The trade profits if the underlying stays between the two short strikes through expiration — a range-bound, neutral, IV-crush bet.

When to use it. IV rank is high, you have no directional conviction, and you expect price to chop sideways into expiration. Earnings-event premium-sellers love this structure when they think the move will be smaller than the market is pricing.

• Max profit. Sum of both credits.
• Max loss. Width of either wing − total credit, times 100. (Both wings are the same width; loss caps on the side that breaches.)
• Breakeven. Short put strike − total credit, and short call strike
  • total credit. (Two breakevens — one each side.)

5. Diagonal Call

You sell a near-term call at one strike and buy a longer-term call at a different (usually lower) strike. The long call is your "stock substitute"; the short call funds it and gets rolled forward each month. It's a multi-cycle play, not a single-expiry play.

When to use it. You're moderately bullish on a longer horizon (quarters, not weeks), you want leverage relative to buying shares outright, and you're willing to actively manage monthly rolls. The trade resembles a Covered Call where you replaced the 100 shares with a long-dated call.

• Max profit. Hard to express in one number — depends on how many short-call cycles you sell before the long call expires, and where the stock lands each cycle. Roughly: long-call appreciation + short-call premiums collected.
• Max loss. Net debit paid (long-call cost − initial short-call credit). The long call can go to zero; that caps the loss.
• Breakeven. Approximately: long-call strike + net debit − premiums collected over time. Moves with each roll.

Picking the right template

The Eval Workspace suggests a template based on IV rank, earnings proximity, and your directional opinion. The match isn't binding — you can override — but the suggestion captures the standard heuristics:

• High IV rank + neutral → Iron Condor
• High IV rank + bullish → CSP or Vertical Credit Put
• Moderate IV + you own the stock → Covered Call
• Low-to-moderate IV + multi-month bullish → Diagonal Call

See also

• What is an OOC? — the lifecycle these templates plug into.
• Reading the Eval Workspace
• Screener Reading Guide — how screener results pre-fill template suggestions.
• Glossary: Flight Plan — your Flight Plan's approval bands gate which templates require advisor sign-off.