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option strategies with examples

Option Strategies – The Long Straddle Strategy

Options Strategies – The Long Straddle

Number of times times have you been in a situation where you take a trade with great confidence, either long or short, and the market immediately reverses direction after you begin the trade? Your entire strategy, planning, effort, and capital are thrown out the window. I’m sure we’ve all been in a position like this. In fact, this is one of the reasons why most expert traders go beyond standard directional bets and develop systems that are resistant to market volatility. “Market Neutral” or “Delta Neutral” tactics are those whose profitability isn’t entirely dependent on market direction.

Long straddle is perhaps the simplest market neutral strategy to implement. Once implemented, the P&L is not … Read the rest

Nifty Trading strategies for options

What exactly is an option trading strategy?

An option trading strategy is a hybrid combination of futures and options, or of two different options, that results in a product with defined risk, returns, or both. Option strategies are possible due to the unique nature of options, which are volatile in nature.

Options strategies are generally classified into six categories, which are as follows:

  1. Bullish strategies
  2. Bearish strategies
  3. Moderately bullish strategies
  4. Moderately bearish strategies
  5. Volatile strategies
  6. Range bound strategies

Protective Puts, Covered Calls and Collars

These are the three most fundamental strategies that are employed on a regular basis. These three options strategies are simple to understand and execute in the F&O Market, despite the fact that they are part of … Read the rest