How to Use Implied Volatility in Options Trading: Strategies

Long Guts-Neutral Strategy

Explanation A long gut is a variant of the Long Strangle option strategy and is implemented by a trader when he/she is non-directional on the movements of the underlying but at the same time is bullish on volatility. While implementing this strategy the trader expects the underlying to move in either direction with high magnitude. […]

Options-Trading-Beginners

Short Call Condor Spread-Neutral Strategy

Explanation Short Call Condor Spread is the opposite of Long Call Condor Spread. A Short Call Condor is a volatile market strategy which is executed for credit investment, meaning that the trader receives premium for executing this strategy. In order to make profit through this strategy, the underlying asset should fulfill he underlying assumption and […]

Options-Trading-Beginners

Long Call Condor Spread-Neutral Strategy

Explanation Since this strategy is a neutral strategy and in order to make profits, the underlying asset should remain range bound i.e., between the 4 strikes.The long call condor investor is looking for little or no movement in the underlying. A Long Call Condor is made for debit investment, meaning that the trader pays for […]

Options-Trading-Beginners

Short Put Ladder-Neutral Strategy

Explanation A Short Put Ladder is a bearish option strategy when trader is bullish on volatility. This strategy is executed for net credit and is the extension of Bull Put spread. The only difference between Short Put Ladder and Bull Put spreadis theadditional lower strike bought.The purpose of buying the additional out-of-the-money (OTM) strike is to […]

How to Use Implied Volatility in Options Trading: Strategies

Short Call Ladder-Neutral Strategy

Explanation Short Call Ladder is a bullish option strategyand is an extension to Bull Call Spread Strategy. This strategy is implemented for net credit investments and offers unlimited return (when market moves beyond the higher Strike (OTM) Call) with limited loss potential. Execution of bull call ladder entails selling 1 in-the-money (ITM) or 1 at-the-money […]