Options Strategies Cheat Sheet - Max Profit, Max Loss and Break-Even
Reviewed by Leon Moyer - Published October 9, 2026 - Last reviewed October 9, 2026
In this lesson
Look up, and check with a worked example, the maximum profit, maximum loss and break-even of each Course 2 strategy.
This cheat sheet lists the maximum profit, maximum loss and break-even of every Course 2 strategy, each as a formula and as a worked number. All figures are at expiration, per 100 shares or one contract, and before commissions and fees. Use it to check your own math, not as a reason to choose any one strategy.
This page re-prices every strategy at one common setup so the rows can be compared: XYZ at $50, 30 days to expiration, and option premiums equal to the free calculator's model prices at 30% implied volatility and a 4.5% rate. The teaching lessons used their own setups, so only the formulas match. The 50 call costs $1.81, the 52 call $0.99, the 55 call $0.33, the 50 put $1.62, the 48 put $0.81 and the 45 put $0.20.
What are max profit, max loss and break-even for the stock-based strategies?
Four strategies are built around 100 shares, either owned or with the cash set aside to buy them, and the wheel chains two of them.
For a collar opened for a net debit instead of a credit, subtract the debit from the maximum profit and add it to the maximum loss and the break-even.
Worked example
The stock-based strategies on XYZ, 30 days
- Covered call (own 100 shares at $50, sell the 52 call for $0.99): maximum profit ($52 - $50 + $0.99) x 100 = $299; maximum loss ($50 - $0.99) x 100 = $4,901, if XYZ went to $0; break-even $49.01.
- Cash-secured put (sell the 48 put for $0.81, with $4,800 set aside): maximum profit $81; maximum loss ($48 - $0.81) x 100 = $4,719, if assigned and XYZ went to $0; break-even $47.19.
- The wheel, one cycle (sell the 48 put for $0.81; if assigned at $48, sell a 30-day 50 call for $0.92, its model price with XYZ at $48): maximum profit ($50 - $48 + $0.81 + $0.92) x 100 = $373 if the shares are called away; maximum loss ($48 - $0.81 - $0.92) x 100 = $4,627, if XYZ went to $0; break-even $46.27.
- Protective put (own 100 shares at $50, buy the 48 put for $0.81): maximum profit unlimited; maximum loss ($50 - $48 + $0.81) x 100 = $281; break-even $50.81.
- Collar (own 100 shares at $50, buy the 48 put for $0.81, sell the 52 call for $0.99, a net credit of $0.18): maximum profit ($52 - $50 + $0.18) x 100 = $218; maximum loss ($50 - $48 - $0.18) x 100 = $182; break-even $49.82.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
The four Course 2 strategies built on 100 shares
Covered call
Max profit: $299
Max loss: $4,901
Break-even: $49.01
Cash-secured put
Max profit: $81
Max loss: $4,719
Break-even: $47.19
Protective put
Max profit: unlimited
Max loss: $281
Break-even: $50.81
Collar
Max profit: $218
Max loss: $182
Break-even: $49.82
Gray line: zero, where the position breaks even. Dashed line: strike. Each sketch shows profit or loss at expiration as the stock price rises from left to right.
The covered call, the cash-secured put and the wheel carry nearly the full downside of owning the stock; the premium only cushions it. If XYZ fell to $0, the 48 put sold for $0.81 would lose $4,719 ($48 x 100 minus the $81 premium), the covered call $4,901 and the wheel $4,627.
What are max profit, max loss and break-even for vertical spreads?
A vertical spread buys one option and sells another of the same type and expiration at a different strike. The width is the distance between the two strikes.
Worked example
The four vertical spreads on XYZ, 30 days
- Bull call spread (buy the 50 call, sell the 55 call, $1.48 debit): maximum profit $352; maximum loss $148; break-even $51.48.
- Bear put spread (buy the 50 put, sell the 45 put, $1.42 debit): maximum profit ($5 - $1.42) x 100 = $358; maximum loss $142; break-even $48.58.
- Bull put spread (sell the 48 put, buy the 45 put, $0.61 credit): maximum profit $61; maximum loss ($3 - $0.61) x 100 = $239; break-even $47.39.
- Bear call spread (sell the 52 call, buy the 55 call, $0.66 credit): maximum profit $66; maximum loss ($3 - $0.66) x 100 = $234; break-even $52.66.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
The four vertical spreads, on one scale
Bull call spread (debit)
Max profit: $352
Max loss: $148
Break-even: $51.48
Bear put spread (debit)
Max profit: $358
Max loss: $142
Break-even: $48.58
Bull put spread (credit)
Max profit: $61
Max loss: $239
Break-even: $47.39
Bear call spread (credit)
Max profit: $66
Max loss: $234
Break-even: $52.66
Gray line: zero, where the position breaks even. Dashed line: strike. Each sketch shows profit or loss at expiration as the stock price rises from left to right.
The formulas match the Options Industry Council's strategy pages for the covered call, cash-secured put, protective put, bull call spread, bear put spread, bull put spread and bear call spread. A net credit lowers the collar's maximum loss, as its $182 worst case shows.
How do you check a strategy that is not on the list?
Use the method from the three numbers for any position: check the stock at $0, at each strike and above the highest strike, then find where the result crosses zero. Any position that ends up net short calls, such as a naked call or a covered call written on more contracts than you have shares for, has undefined risk and does not belong in this table.
The XYZ collar: shares, a 48 put and a 52 call, at expiration
Hover or tap the chart, or focus it and use the arrow keys, to read any price.
Open this trade in the free calculatorShow as table
What does this table not tell you?
- How likely each outcome is. Probability of profit covers that, as a model estimate.
- Whether the trade is worth it. The risk-to-reward ratio and expected value cover the trade-offs.
- What happens before expiration. Positions can be closed early, and short American-style stock options can be assigned early.
- Costs and taxes. Commissions, fees, the bid-ask spread and taxes all reduce real results. Brokers also set their own approval levels and margin or cash requirements, so check your broker.
Check your understanding
You own XYZ at $40 and sell the 45 call for $1.20. What are the maximum profit, maximum loss and break-even?
Show answer
Maximum profit ($45 - $40 + $1.20) x 100 = $620. Maximum loss ($40 - $1.20) x 100 = $3,880, if the stock went to $0. Break-even $38.80.
A bear call spread on a $5-wide pair of strikes collects $1.50. What are its maximum profit and maximum loss?
Show answer
Maximum profit is the $1.50 credit, $150. Maximum loss is the $5 width minus the credit, $3.50, or $350.
Which two single-trade Course 2 strategies can lose close to the full value of 100 shares?
Show answer
The covered call and the cash-secured put. In both, the premium only cushions a fall in the stock; neither has a put to limit the downside.
Key takeaways
- Every Course 2 strategy has a one-line formula for its maximum profit, maximum loss and break-even.
- Debit spreads risk the debit; credit spreads risk the width minus the credit.
- Covered calls and cash-secured puts carry large, stock-sized risk; protective puts and collars cap it with a bought put.
- The table shows the extremes only. Pair it with probability, expected value and your broker's rules before trading.
Common questions
Which Course 2 strategies have the smallest maximum loss?
The debit spreads and the protective strategies have small, defined maximum losses, while covered calls and cash-secured puts can lose nearly the full value of the shares. Lower maximum loss usually comes with a lower maximum profit or a lower chance of profit, and no strategy is risk-free.
What is the break-even of a covered call?
The price you paid for the shares minus the call premium received. Owning XYZ at $50 and selling the 52 call for $0.99 puts the break-even at $49.01.
Do vertical spreads have limited risk?
Yes. Held to expiration, a vertical spread's loss is capped by the long option: a debit spread can lose the debit, and a credit spread can lose the width between the strikes minus the credit. Early assignment of the short leg can still create a stock position before expiration.
What is the max loss on a cash-secured put?
The strike minus the premium, times 100, which is what you would lose if you were assigned and the stock then went to $0. Selling the 48 put for $0.81 has a maximum loss of $4,719.