11 Options Trading Categories

Jesus will show up, we just have to ask and trust!

So, I was bored tonight and got to thinking about the different types of options trades I’ve either made or considered making. As I recounted the hundreds or thousands of different combinations it occurred to me that they all fit into different baskets. For instance, some trades are bullish and some are bearish. We know that. However, some are also short or long vega with some others short or long theta.

After going back and forth with that for a while I began to wonder if it was possible to trade every strategy, all at once. Before I could though, I needed to know every possible combination. In this brief post, I want to explore the 11 options trading categories I came up with. I won’t suggest it’s an exhaustive list but it does house most of the options trading strategies we’re all familiar with.

Let’s get into it.

Post Agenda

• 11 Options Trading Categories
• 11 Options Trading Strategies
• Potential Performance
• My Market Assumption vs. AI’s Market Assumption

11 Options Trading Categories

To begin, I actually came up with 12 options trading categories but the 12th one was actually a gamma scalping strategy. That strategy required dynamically hedging delta which was more of a maintenance technique than an outright options strategy. It technically fits but I eliminated it none the less. For those interested, that category was, “Neutral direction, Short Vega, and Negative Theta”.

Now, here are the 11 different categories I chose to focus on;

1. Bullish direction, Long Vega, and Positive Theta
2. Bullish direction, Long Vega, and Negative Theta
3. Bullish direction, Short Vega, and Positive Theta
4. Bullish direction, Short Vega, and Negative Theta
5. Bearish direction, Long Vega, and Positive Theta
6. Bearish direction, Long Vega, and Negative Theta
7. Bearish direction, Short Vega, and Positive Theta
8. Bearish direction, Short Vega, and Negative Theta
9. Neutral direction, Long Vega, and Positive Theta
10. Neutral direction, Long Vega, and Negative Theta
11. Neutral direction, Short Vega, and Positive Theta

With this list I could begin pairing up different options strategies to fit each category. Still, if you know of a strategy that fits the 12th criteria please let us all know in the comments below. It just bugs me I don’t have one. :))

11 Options Trading Strategies

Upon inspection, each category could actually include various different options strategies. However, to keep it simple, I chose the strategies that best fit the criteria, had the lowest cost, least risk and that I have traded before.

Here are the 11 options trading strategies based on their respective categories;

1. Bullish direction, Long Vega, and Positive Theta – OTM Long Call Calendar Spread
2. Bullish direction, Long Vega, and Negative Theta – OTM Long Call
3. Bullish direction, Short Vega, and Positive Theta – OTM Bull Put Credit Spread
4. Bullish direction, Short Vega, and Negative Theta – ITM Bull Call Debit Spread
5. Bearish direction, Long Vega, and Positive Theta – OTM Long Put Calendar Spread
6. Bearish direction, Long Vega, and Negative Theta – OTM Long Put
7. Bearish direction, Short Vega, and Positive Theta – OTM Bear Call Credit Spread
8. Bearish direction, Short Vega, and Negative Theta – ITM Bear Put Debit Spread (I think skew makes it impossible to achieve Short Vega and Negative Theta but I don’t want to dissect further at this time)
9. Neutral direction, Long Vega, and Positive Theta – ATM Long Call or Put Calendar Spread
10. Neutral direction, Long Vega, and Negative Theta – OTM 10-point wide Long Iron Butterfly
11. Neutral direction, Short Vega, and Positive Theta – ATM 20-point wide Short Iron Butterfly

Here is each trade from the ThinkorSwim analyze tab in case you want to inspect further.

Potential Performance

Looking at each position graphically reveals a lumpy butt crack with a profit tent in the center near $2000. In total, my assumption is each strategy could be set up more thoughtfully to decrease the risk to either side of the tent. Regardless, on the whole the portfolio of positions here is delta neutral, negative theta, and immensely positive vega.

You may notice I initiated each position in the May 25 expiration and included June 25 for any time spreads. As of today, that’s 83 DTE for the May 25 expiration. Here are the results, month by month.

My Market Assumption vs AI’s Market Assumption

Now that we’ve looked at each strategy and how that might have looked over time. The next logical step would be to make some assumptions about the current market. Using Perplexity.ai, I asked it to determine if the best trade to take today would be bullish, bearish, short vol, long vol, short theta, or long theta.

Before I give you those results though, here is my own assumption on the state of the market. First, I’m more neutral than anything else. With the bouts of volatility we’ve seen to start 2025, I’d prefer to be long vega and I will probably always have a preference for short theta. Meaning, for me, I want a position that is: Neutral direction, Long Vega, and Positive Theta. Thus, based on my own assumption I should be entering a long call/put calendar spread right at the money.

Now, here is Perplexity’s answer;

As you can see, AI and I disagree on most. I’m more neutral on the market right now where AI is remaining bullish. I prefer long vega where AI prefers short vega. Lastly, while AI and I view short or long theta oppositely, it seems we both want to be taking advantage of options decay.

• Jeffs Choice – Long Put Calendar Spread
• AI Choice – OTM Bull Put Credit Spread

Finally, I didn’t ask Perplexity to give me a specific options strategy, I just used the response and picked the resulting trade from the 11 options strategies above. However, I did take the liberty of creating each spread below with similar risk. This way we could go back later and see the results of each strategy.

In any case, let me know in the comments below what trade you think is the best based on the current market environment. This should be a fun exercise to look back and see who spotted the winning formula from these 11 options trading categories.

Until the next post.

God bless,

Jeff