A Short Straddle involves selling a call option and a put option at the same strike price and expiry. It profits from minimal price movement. Ideal for low-volatility conditions, where price movement is expected to remain stable. Selling ATM options maximizes premium income. Risk is unlimited if the price moves significantly in either direction. Profits … Read more
A Long Straddle involves buying a call option and a put option at the same strike price and expiry. It profits from significant price movement in either direction. Ideal for high-volatility conditions, where a large price move is expected but direction is uncertain. Buying ATM options maximizes sensitivity to price changes. Risk is limited to … Read more
A Protective Put is a hedging strategy where you buy a put option to protect a long position in the underlying. It limits losses if the price unexpectedly falls. Ideal for bullish conditions, where there is a risk of price falling. Buying a slightly OTM put provides cost-effective protection. Limits potential losses on the long … Read more
A Protective Call is a hedging strategy where you buy a call option to protect a short position in the underlying asset. It works best when there’s a risk of the price rising unexpectedly. Ideal for bearish conditions, where the price might unexpectedly rise. Buying a slightly OTM call provides cost-effective protection. Limits potential losses … Read more
A Covered Put is a strategy where you short the underlying (e.g., BANKNIFTY Futures) and sell a put option at a lower strike price to earn premium income. It works best when the underlying price is expected to fall slightly but stay above the strike price. Ideal for moderately bearish conditions, where a modest price … Read more
A Covered Call is a strategy where you hold the underlying (e.g., NIFTY or BANKNIFTY Futures) and sell a call option at a higher strike price to earn premium income. This strategy works best when the underlying price is expected to rise slightly but stay below the strike price. Ideal for moderately bullish conditions, where … Read more