A - Z List of Trading Strategies

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Option rookies are often eager to begin trading — too eager. Each is less risky than owning stock. Simple option trading strategy involve limited risk. For investors not familiar with options lingo read our beginners options terms and intermediate options terms posts.

Using stock simple option trading strategy already own or buy new sharesyou sell simple option trading strategy else a call option that grants the buyer the right to buy your stock at a specified price. That limits profit potential. You collect a cash premium that is yours to keep, no matter what else happens. That cash reduces your cost. Thus, if the stock declines in price, you may incur a loss, but you are better off than if you simply owned the shares.

Cash-secured naked put writing. Sell a put option on a stock you want to own, choosing a strike price that represents the price you are willing to pay for stock. You collect a cash premium in return for accepting an obligation to buy stock simple option trading strategy paying the strike price.

A collar is a covered call position, with the addition simple option trading strategy a put. The put acts as an insurance policy and limit losses to a minimal but adjustable amount. The purchase of one call option, and the sale of another.

Or the purchase of one put option, and the sale of another. Both options have the same expiration. Thus, the higher priced option is sold, and a less expensive, further out of the money option is bought. This strategy has a market bias call spread is bearish and put spread is bullish with limited profits and limited losses.

A position that consists of one call credit spread and one put credit spread. Again, gains and losses are limited. Diagonal or double diagonal spread. These are spreads in which the options have different strike prices and different expiration dates. The option bought expires later than the option sold 2. The option bought is further out of the money than the option sold. The likelihood of consistently making money when buying options is small, and I cannot recommend that strategy.

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Below you will find a simple alphabetical list of all the options trading strategies that we cover on this site. If you are looking for further details on a specific strategy then simply scroll down to that one and click on the relevant link. We have also provided a very brief description of each one. An advanced neutral trading strategy. A complex bearish trading strategy. A bearish trading strategy that requires a high trading level.

Bear Put Ladder Spread: A bearish trading strategy that is suitable for beginners. See Options Arbitrage Strategies. A complex bullish trading strategy. Bull Call Ladder Spread: A bullish trading strategy that is suitable for beginners. A bullish trading strategy that requires a high trading level. A simple neutral trading strategy. A fairly complicated volatile trading strategy that leans towards bullish. A fairly simple neutral trading strategy that is suitable for beginners.

A relatively simple neutral trading strategy that is suitable for beginners. A fairly complex neutral trading strategy. A single transaction bullish trading strategy. A simple volatile trading strategy suitable beginners. A single transaction bearish trading strategy that is suitable for beginners.

A simple volatile trading strategy suitable for beginners. A reasonably complex volatile trading strategy that leans towards bearish. Reverse Iron Albatross Spread: A complex volatile trading strategy. Reverse Iron Butterfly Spread: A complicated volatile trading strategy. Reverse Iron Condor Spread: An advanced volatile trading strategy. Short Bear Ratio Spread: A fairly complicated bearish trading strategy. Short Bull Ratio Spread: A fairly complicated bullish trading strategy.

Short Calendar Call Spread: Short Calendar Put Spread: A single transaction bearish trading strategy. A relatively simple neutral trading strategy. A quite straightforward neutral trading strategy. See Synthetic Options Strategies. A - Z List of Trading Strategies Below you will find a simple alphabetical list of all the options trading strategies that we cover on this site.

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