Introduction The Long Butterfly Spread is a low-risk, limited-profit options trading strategy designed for markets with low volatility. This strategy allows traders to take advantage of small price movements while keeping risk limited. The Long Butterfly Spread is ideal for traders who expect the underlying asset to stay near a specific price level at expiration. …
Long Butterfly Spread: A Powerful Neutral Options Strategy Read More »
Introduction A Short Synthetic Future is an options strategy that replicates shorting a futures contract using call and put options. By simultaneously selling a call and buying a put at the same strike price and expiration date, traders can mimic the payoff of being “short” the underlying. This strategy is useful for traders who anticipate …
A Long Synthetic Future is an options strategy that replicates owning a futures contract using call and put options. By simultaneously buying a call and selling a put at the same strike (and same expiration), you can mimic the payoff of being “long” the underlying. This approach often requires lower margin than buying the actual …
A Short Iron Condor is an options strategy that profits from a range-bound market while limiting risk on both the upside and downside. It involves selling two options (a call and a put) closer to the current market price, and buying two options further out-of-the-money to cap the maximum loss. This guide will explain how …
What is a Long Iron Condor? A Long Iron Condor is a debit options strategy that aims to profit from large price moves in the underlying—either up or down—while limiting risk on both sides. It consists of four legs: two long options (one call and one put) and two short options (one call and one …
What is a Short Strangle? A Short Strangle is an options strategy where you sell an out-of-the-money (OTM) call and sell an out-of-the-money (OTM) put, both with the same expiration date but different strike prices. Similar to a Short Straddle, the goal is to profit from low volatility and time decay—you expect the underlying price …
What is a Long Strangle? A Long Strangle is an options strategy where you buy an out-of-the-money (OTM) call and buy an out-of-the-money (OTM) put with the same expiration date but different strike prices. This strategy profits from significant price movement in either direction, without requiring that the underlying be at-the-money at trade initiation. Understanding …
What is a Short Straddle? A Short Straddle is an options strategy where you sell both a call option and a put option at the same strike price (often at-the-money) and the same expiration date. Unlike a Long Straddle, which aims to profit from large directional moves, a Short Straddle profits from low volatility and …
What is a Long Straddle? A Long Straddle is an options strategy where you buy both a call option and a put option at the same strike price (often at-the-money) and the same expiration date. This strategy benefits from large price movements in either direction; you’re not predicting which way the market will move, just …
What is a Bull Put Spread? A Bull Put Spread is a neutral-to-bullish options strategy where you sell a put option at a higher strike and buy another put option at a lower strike (both with the same expiration). This setup creates a net credit and helps limit your maximum loss if the underlying price …
