Important notes (please read): a. This quick guide is for reference only and no strategy should be traded without knowledge and testing of the strategy, and a formal written trading including entry and exit criteria b. Strike price placement is key in many of these strategies on should be based on criteria beyond simply ITM/OTM c. Time to expiry may differ dependent on prevailing market conditions and the specific stock in question. As a general rule net credit position should be short in duration to limit risk and take advantage of time decay d. Note with credit option positions a cash margin requirement is often necessary e. Intensity - 1=every 2-3 days, 2 = daily, 3 = x2 daily f. Experience - B = Beginner; I = Intermediate; A = Advanced g. The ultimate outcome of some strategies e.g. Covered calls, diagonal call spreads involving the multiple sale of options positions on a monthly basis is not reflected below.
Quick guide to Options Strategies
© – 1 Credit/ Strategy Trade set up Outlook Duration Debit Profit Risk Intensity Experience Long Call Long Put Short Call Short Put Covered Call Diagonal Call Spread Collar Bull Call spread Bull Put Spread Bear Call Spread Bear Put Spread Long call butterfly Long Put Butterfly Short Call butterfly Long Straddle Long Strangle
© – 2 Credit/ Strategy Trade set up Outlook Duration Debit Profit Risk Intensity Experience Short Straddle Short Strangle Short Iron Condor Long Iron Condor Ratio call spread Ratio Call Backspread Ratio Put Spread Ratio Put Backspread Diagonal Put Spread Calendar Call Spread Synthetic stock
Mike Smith
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