For a series of call options, the smaller the strike price, the more in-the-money, the more exposure to the stock price change. When stock price goes up, a call option with smaller strike price will increase more; when the stock price goes down, a call option with smaller strike price will decrease more.

For a series of put options, the bigger the strike price, the more in-the-money, the more exposure to the stock price change. When stock price goes up, a put option with bigger strike price will decrease more; when the stock price goes down, a put option with bigger strike price will increase more.

Time Decay

For a series of call or put options, the more at-the-money (this will be determined by the current stock price, so which call option is more at-the-money is dynamic), the more exposure to the time decay, which means it will decrease more.

Volatility

For a series of call options, the more at-the-money (this will be determined by the current stock price, so which call option is more at-the-money is dynamic), the more exposure to the volatility change. When the volatility is up, a call option more at-the-money will increase more; when the volatility is down, a call option more at-the-money will decrease more.

For a series of put options, the more at-the-money (this will be determined by the current stock price, so which put option is more at-the-money is dynamic), the more exposure to the volatility change. When the volatility is up, a put option more at-the-money will increase more; when the volatility is down, a put option more at-the-money will decrease more.

Debit Call Spread

A debit call spread is buying a call option with the lower strike price, and selling a call option with the higher strike price.

It is to your advantage if the call option with the lower strike price increases more in price than the option with the higher strike prices, or the call option with the lower strike price decreases less in price than the option with the higher strike price.

If the stock price increases (advantage), the call option with the lower strike price increases more in price than the option with the higher strike prices, but the difference of their increase amounts will decrease as the stock price increases. If the stock price decreases, the call option with the lower strike price decreases more in price than the option with the higher strike prices, but the difference of their decrease amounts will decrease as the stock price decreases.

As time passes, if the stock price is at a higher level (advantage), then the call option with the higher strike price will be more at-the-money and has bigger time decay; if the stock price is at a lower level, then the call option with the lower strike price will be more at-the-money and has bigger time decay.

If the volatility increases, and if the stock price is at a higher level, then the call option with the higher strike price will be more at-the-money and increases more, but if the stock price is at a lower level (advantage), then the call option with the lower strike price will be more at-the-money and increases more; if the volatility decreases, and if the stock price is at a higher level (advantage), then the call option with the higher strike price will be more at-the-money and decreases more, but if the stock price is at a lower level, then the call option with the lower strike price will be more at-the-money and decreases more.

Credit Call Spread

A credit call spread is selling a call option with the lower strike price, and buying a call option with the higher strike price.

It is to your advantage if the call option with the lower strike price decreases more in price than the option with the higher strike prices, or the call option with the lower strike price increases less in price than the option with the higher strike price.

If the stock price decreases (advantage), the call option with the lower strike price decreases more in price than the option with the higher strike prices, but the difference of their decrease amounts will decrease as the stock price decreases. If the stock price increases, the call option with the lower strike price increases more in price than the option with the higher strike prices, but the difference of their increase amounts will decrease as the stock price increases.

As time passes, if the stock price is at a lower level (advantage), then the call option with the lower strike price will be more at-the-money and has bigger time decay; if the stock price is at a higher level, then the call option with the higher strike price will be more at-the-money and has bigger time decay.

If the volatility increases, and if the stock price is at a higher level (advantage), then the call option with the higher strike price will be more at-the-money and increases more, but if the stock price is at a lower level, then the call option with the lower strike price will be more at-the-money and increases more; if the volatility decreases, and if the stock price is at a higher level, then the call option with the higher strike price will be more at-the-money and decreases more, but if the stock price is at a lower level (advantage), then the call option with the lower strike price will be more at-the-money and decreases more.

Credit Put Spread

A credit put spread is buying a put option with the lower strike price, and selling a put option with the higher strike price.

If the stock price increases (advantage), the put option with the higher strike price decreases more in price than the option with the lower strike price, but the difference of their decrease amounts will decrease as the stock price increases. If the stock price decreases, the put option with the higher strike price increases more in price than the option with the lower strike prices, but the difference of their increase amounts will decrease as the stock price decreases.

As time passes, if the stock price is at a lower level, then the put option with the lower strike price will be more at-the-money and has bigger time decay; if the stock price is at a higher level (advantage), then the put option with the higher strike price will be more at-the-money and has bigger time decay.

If the volatility increases, and if the stock price is at a higher level, then the put option with the higher strike price will be more at-the-money and increases more, but if the stock price is at a lower level (advantage), then the put option with the lower strike price will be more at-the-money and increases more; if the volatility decreases, and if the stock price is at a higher level (advantage), then the put option with the higher strike price will be more at-the-money and decreases more, but if the stock price is at a lower level, then the put option with the lower strike price will be more at-the-money and decreases more.

Two Call Spreads

Let us define the value of a call spread is the call option with the larger value minus the other one with the smaller value. Hence, for a debit call spread, you want its value goes up; whereas for a credit call spread, you want its value goes down.

Let us define the delta of the call spread is the delta of the call option with the larger value minus the delta of the other call option with the smaller value. The following is a typical curve of the delta of a call spread.

For 2 call spreads like above, the value of spread 1 is always bigger than spread 2.

Suppose spread 1 is a debit spread, spread 2 is a credit spread, this is a butterfly. Then the value of the butterfly is the value of spread 1 minus the value of spread 2. the delta of the butterfly is the delta of spread 1 minus the delta of spread 2. the following is the typical curve of the delta of a butterfly.

Above are my personal study notes and thoughts about stock option trading.