Short-Call-Option-trading-strategy

Long Put Option Trading Strategy-Bearish Strategy

Explanation A long put option trading strategy is a single-leg option strategy used by a trader/dealer when he perceives market volatility with a bias towards the downside. To execute this strategy, the trader would purchase options by paying a premium, which gives him the right but not the obligation to sell the underlying asset at […]

Short-Call-Option-trading-strategy

Short Call Option trading strategy-Bearish Strategy

Explanation A short call is a single-leg options trading strategy for traders who believe the market will trade bearish in the short term. Market players who use this strategy go on by selling options. A trader sells uncovered calls, which mean the option writer does not own the underlying asset at the time of sale […]

How to Use Implied Volatility in Options Trading: Strategies

Ratio Call Spread-Neutral Strategy

Explanation Ratio call spread is implemented by traders who are neutral on the market and bearish on the volatility in the near future. The strategy involves buying a number of options and selling more than the bought options of the same underlying stock and expiration date at a different strike price. The decision of the […]

How to Use Implied Volatility in Options Trading: Strategies

ShortGuts-Neutral Strategy

Explanation Short gut is a variant of the short Strangle option strategy and is implemented by a trader when he/she sees no volatility in the market and expects the underlying to trade range bound till expiry. This strategy is implemented by selling in-the-money calls and in-the-money puts on the same underlying stock and of the […]

How to Use Implied Volatility in Options Trading: Strategies

Ratio Call Write-Neutral Strategy

Explanation Ratio call write is a neutral options trading strategy. This options strategy is constructed with ownership of the underlying security or going long on future contract and simultaneously selling more call options than underlying asset owned. On implementing this strategy and taking base assumption of little/no volatility, the trader capitalizes on the limited profit […]