Iron Condor – Options Strategies
The Iron Condor is a complex, market-neutral options trading strategy designed for experienced investors. It involves four different options with the same expiration date but different strike prices. This strategy aims to profit from low volatility in the underlying asset and the passage of time, assuming the asset’s price remains within a specific range. How […]
Iron Butterfly Strategy – Options Strategies
How It Works The iron butterfly strategy has four options: selling an at-the-money (ATM) put, buying an out-of-the-money (OTM) put, selling an ATM call, and purchasing an OTM call. All of these options have the same expiration date and are linked to the same underlying asset. This strategy essentially combines a short straddle (selling both […]
Long Butterfly Spread with Calls – Options Strategies
How It Works. The long call butterfly spread is a complicated options strategy that incorporates characteristics of both bull and bear spreads while employing three different strike prices. To execute this strategy, an investor will buy one in-the-money (ITM) call option at a lower strike price, sell two at-the-money (ATM) call options, and purchase one […]
Straddles vs. Strangles Options Strategies
Table of Contents Long Straddle Strategy How It Works A long straddle strategy involves buying both a call and a put option on the same underlying asset. These options have the same strike pricing and expiration dates. This dual buy allows the investor to profit from major price swings in the asset, whether they go […]
Protective Collar – Options Trading Strategies
Table of Contents How It Works: The protective collar strategy consists of two key actions: buying an out-of-the-money (OTM) put option and writing an OTM call option, both of which have the same expiration date. This method is used when an investor already owns the underlying asset. The purchase of an OTM put option provides […]
Bull Call Spread Vs Bear Put Spread – Options Trading Strategies
Table of Contents Options strategies can be basic or sophisticated, with one or many option contracts and, in some cases, the underlying asset. These tactics are intended to mitigate risk, speculate on volatility, and profit from specific market conditions. Bull Call Spread Strategy How It Works A bull call spread includes buying call options at […]
Covered Call Vs Married Put – Options Trading Strategies
Table of Contents Options strategies can be basic or sophisticated, with one or many option contracts and, in some cases, the underlying asset. These tactics are intended to mitigate risk, speculate on volatility, and profit from specific market conditions. Covered Calls A Covered Call strategy involves the trader holding a long position in an underlying […]
Short Call Vs Short Put – Options Trading Strategies
Options strategies can be basic or sophisticated, with one or many option contracts and, in some cases, the underlying asset. These tactics are intended to mitigate risk, speculate on volatility, and profit from specific market conditions. Short Call Investors that want to profit from a drop in volatility or in the price of the underlying […]
Long Call Vs Long Put – Options Trading Strategies
Options strategies can be basic or sophisticated, with one or many option contracts and, in some cases, the underlying asset. These tactics are intended to mitigate risk, speculate on volatility, and profit from specific market conditions. Long Call With a specified risk, investors can bet on the future appreciation of the price of an underlying […]
The Importance of Time Value in Options Trading
In options trading, the concepts of expiration and time decay are critical for efficiently developing and managing trading strategies. These considerations have a direct impact on option valuation and, consequently, option trading profitability. Here’s a closer look at how these factors influence options trading: Expiration Definition: Expiration refers to the date and time at which […]
