Part 7 Trading Master Class With Experts

Types of Option Strategies

Option trading is not just about buying calls or puts; it involves strategic combinations to profit under various market conditions. Some popular strategies include:

a) Bullish Strategies

Bull Call Spread: Buying a lower strike call and selling a higher strike call.

Bull Put Spread: Selling a higher strike put and buying a lower strike put.

b) Bearish Strategies

Bear Call Spread: Selling a lower strike call and buying a higher strike call.

Bear Put Spread: Buying a higher strike put and selling a lower strike put.

c) Neutral Strategies

Iron Condor: Selling one call and one put at close strikes while buying further out-of-the-money options.

Straddle: Buying both a call and put at the same strike to profit from big moves in either direction.

Strangle: Buying a call and a put at different strikes to benefit from volatility.

These strategies allow traders to earn consistent returns by managing risk rather than relying purely on market direction.