Explanation Long Put Butterfly is a neutral – three-part option strategy where a trader assumes a bearish market scenario with low volatility.This option strategy involves selling and buying put option, to be precise buying one higher out-of-the-money (ITM) strike put, selling two middle at-the-money (ATM) strike puts, and buying one lower in-the-money (OTM) strike put. […]

Explanation A short call butterfly option strategy is opposite of long call butterfly spread. It is a three-part strategy that involves selling and buying call option. Implementation of this option strategy involves selling one higher out-of-the-money (OTM) strike call, buying two middle at-the-money (ATM) strike calls, and selling one lower in-the-money (ITM) strike call. All […]

Explanation A long call butterfly spread is a three-part strategy that involves selling and buying call option.For executing this option strategy, it involves buying one higher out-of-the-money (OTM)strike call, selling two middle at-the-money (ATM)strike calls, and buying one lower in-the-money(ITM)strike call. All call options should have the same expiry date, and the distance between the […]

Explanation Short Strangle option strategy is similar to Short Straddle.The only difference is of the strike prices at which the positions are built.Executing of short strangleis made for net credit and involves selling call and put options. A trader will sell one out-of-the-money (OTM) call option and one out-of-the-money (OTM) put option, of same expiry […]

Explanation A long Strangle is in many ways similar to a long Straddle option strategy. While executing a Strangle, a trader will buy one out-of-the-moneycall option and one out-of-the-money put option, of same expiry date and of the same underlying asset. As the trader move toward OTM strikes, the costfor entering into the contract willstart […]