A Bear Ratio Spread involves buying one put option at a higher strike price and selling multiple put options at lower strike prices. It profits from moderate price decreases but carries higher risk if the price falls sharply. Ideal for moderately bearish conditions, where a limited price drop is expected. Buying an ATM put and … Read more
A Bull Ratio Spread involves buying one call option at a lower strike price and selling multiple call options at higher strike prices. It profits from moderate price increases but carries higher risk if the price rises sharply. Ideal for moderately bullish conditions, where a limited price rise is expected. Buying an ATM call and … Read more
A Bear Call Spread involves selling a call option at a lower strike price and buying a call option at a higher strike price. It profits from a moderate price decline or stability. Ideal for moderately bearish conditions, where price is expected to stay below the lower strike price. Selling a slightly OTM call generates … Read more
An Iron Condor combines a Bull Put Spread and a Bear Call Spread to profit from minimal price movement within a range. It involves selling an OTM put and an OTM call and buying farther OTM put and call options for protection. Ideal for neutral markets, where price is expected to stay within a defined … Read more
A Short Call Butterfly involves selling one call option at a lower strike, buying two call options at a middle strike, and selling one call option at a higher strike. It profits from significant price movement outside the range of the middle strike. Ideal for high-volatility conditions, where a large price move is expected. Strike … Read more
A Long Call Butterfly involves buying one call option at a lower strike, selling two call options at a middle strike, and buying one call option at a higher strike. It profits when the price stays near the middle strike at expiry. Ideal for low-volatility conditions, where price is expected to remain range-bound. Strike prices … Read more
A Bull Put Spread involves selling a put option at a higher strike price and buying a put option at a lower strike price. It profits from moderate price increases or stability. Ideal for moderately bullish conditions, where the price is expected to stay above the higher strike price. Selling a slightly OTM put and … Read more
A Bull Call Spread involves buying a call option at a lower strike price and selling a call option at a higher strike price. It profits from moderate price increases. Ideal for moderately bullish conditions, where a limited price rise is expected. Buying an ATM call and selling an OTM call reduces cost while limiting … Read more
A Short Strangle involves selling a call option and a put option at different strike prices but the same expiry. It profits from minimal price movement within the range. Ideal for low-volatility conditions, where the price is expected to stay range-bound. Selling OTM options balances premium income and risk. Risk is significant if the price … Read more
A Long Strangle involves buying a call option and a put option at different strike prices but the same expiry. It profits from significant price movement in either direction. Ideal for high-volatility conditions, where a large price move is expected but at a lower cost than a straddle. Buying OTM options reduces the upfront premium … Read more