Pillar 06 · Micro Equity Execution
Once the macro view is set across rates, growth, margins, FX and rotation — this is the execution endpoint: how to express it with defined risk.
Six interactive simulations covering the most widely-used options strategies — payoff diagrams, break-even analysis, and Greek sensitivity — with live controls so you can see how each strategy responds to changes in price, volatility, and time.
A covered call means you already own 100 shares of a stock and you sell someone else the right to buy those shares at a fixed price (the "strike") before expiry. In exchange, you collect a premium upfront — cash in your pocket today. The catch: if the stock rockets above the strike, you hand over the shares at the agreed price and miss the extra upside. You still own the stock below the strike, and the premium cushions any small decline.
It's one of the most conservative options strategies — often used by long-term holders to generate extra income from stocks they plan to keep anyway.
An iron condor is a four-leg options trade where you sell a call spread and sell a put spread at the same time. You're drawing a "corridor" around the current stock price and collecting premium for agreeing to absorb losses if the stock leaves that corridor. As long as the stock expires inside the range, you keep everything.
It's a favourite of traders who expect low volatility — the ideal outcome is a stock that barely moves. Think of it as selling insurance against big moves in either direction, and pocketing the premium when nothing dramatic happens.
A straddle means buying both a call and a put at the same strike price. You don't care which direction the stock moves — you just need it to move enough to cover the cost of both options. It's used before earnings reports, Fed announcements, or any event where a big swing is expected but the direction is uncertain.
The flip side: if the stock barely moves, you lose the combined premium you paid. Both options decay toward zero if the stock sits still — so time is your enemy here.
A butterfly spread uses three strike prices: you buy one option at the low strike, sell two at the middle (your target), and buy one at the high strike. The wings cap your losses; the body in the middle is where you profit. The whole trade costs a tiny net debit — so your maximum possible loss is small and defined from day one.
Butterflies are precision trades. They work best when you have a firm view on where the stock will land at expiry, not just whether it goes up or down.
Theta (θ) is the Greek that measures how much an option's value erodes every day that passes, with all else equal. An option is a wasting asset — its time value bleeds away continuously, and that bleed accelerates sharply as expiry approaches. For option sellers this is a feature; for buyers, a constant headwind.
The decay curve is non-linear: an option loses relatively little per day with months left, but haemorrhages value in the final weeks and days. This simulation makes that curve tangible.
Gamma (Γ) measures how fast your delta — your directional exposure — changes as the stock moves. High gamma means your position can quickly shift from neutral to strongly directional. That's great if you're long options into a big move; dangerous if you're short and unhedged.
The fundamental tension: long-gamma positions benefit from large moves (good) but suffer from time decay (bad). Short-gamma positions collect time decay (good) but get hurt by large moves (bad). You can't have both — this trade-off is one of the core laws of options pricing.