What are the various types of Option Strategies?

What are the various types of Option Strategies?

• Long Call: This strategy involves buying a call option, giving the holder the right to purchase the underlying asset at a specified price within a certain period.

• Long Put: This strategy involves buying a put option, giving the holder the right to sell the underlying asset at a specified price within a certain period.

• Covered Call (‘Buy Write’): This strategy entails selling a call option while buying the corresponding share position.

• Covered Put: This strategy involves selling a put option while shorting the corresponding share position.

• Cash Secured Put: This entails selling a put option whilst you have the cash in your account buy the stock if assigned.

• Long Straddle: This strategy involves buying both a call option and a put option with the same strike price and expiration date on the same underlying asset, allowing you to profit from significant price movement in either direction.

• Long Strangle: This strategy entails buying a call option and a put option with different strike prices but the same expiration date, typically with the call strike above and put strike below the current stock price.

• Protective Put: This strategy involves buying a put option while holding a long position in the underlying stock, providing downside protection similar to insurance for your stock holdings.

• Protective Call: This strategy entails buying a call option while holding a short position in the underlying stock, providing upside protection to limit potential losses on the short position.

• Collar: This strategy combines a protective put with a covered call on the same underlying asset, creating a range of potential outcomes by limiting both upside and downside potential.

• Credit Spread: This strategy involves selling an option with higher premium and simultaneously buying an option with lower premium, resulting in a net credit to your account.

• Debit Spread: This strategy entails buying an option with higher premium and simultaneously selling an option with lower premium, resulting in a net debit from your account.

• Calendar Spread: This strategy involves selling a near dated contract while simultaneously buying a longer-dated contract with the same strike price.

• Diagonal Spread: This strategy involves selling a near dated contract while simultaneously buying a longer-dated contract at a different strike price

• Long Butterfly: This strategy involves buying two options at outer strike prices and selling two options at a middle strike price, all with the same expiration date, creating a position that profits from minimal price movement.

• Short Butterfly: This strategy entails selling two options at outer strike prices and buying two options at a middle strike price, all with the same expiration date, profiting from significant price movement in either direction.

• Long Condor: This strategy involves buying options at the outer strike prices and selling options at two inner strike prices, creating a wider profit range than a butterfly spread.

• Short Condor: This strategy entails selling options at the outer strike prices and buying options at two inner strike prices, profiting from significant price movement beyond the outer strikes.

• Long Iron Butterfly: This strategy combines a bull put spread and a bear call spread with the same middle strike price, using both puts and calls to create a position that profits from minimal price movement.

• Short Iron Butterfly: This strategy combines a bear put spread and a bull call spread with the same middle strike price, using both puts and calls to profit from significant price movement in either direction.

• Long Iron Condor: This strategy combines a bull put spread and a bear call spread with different middle strike prices, creating a range where the position profits from the underlying staying within those strikes.

• Short Iron Condor: This strategy combines a bear put spread and a bull call spread with different middle strike prices, profiting when the underlying moves significantly beyond either outer strike.

• Back Ratio Call Spread: This strategy involves buying more call options than you sell, typically buying calls at a higher strike price while selling fewer calls at a lower strike price.

• Back Ratio Put Spread: This strategy entails buying more put options than you sell, typically buying puts at a lower strike price while selling fewer puts at a higher strike price