Category: Learning
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PUT BUTTERFLY
This structure can simply be described as tying off the open ended risk involved in a Put spread 1×2. In the Put spread 1×2 example of the 125/100 Put 1×2, we would just buy an additional Put below our 2 short 100 Puts. Any strike below it would work, but let’s keep it equidistant for […]
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CALL BUTTERFLY
This structure can simply be described as tying off the open ended risk involved in a Call spread 1×2. In the Call spread 1×2 example of the 100/125 Call 1×2, we would just buy an additional Call above our 2 short 125 Calls. Any strike above it would work, but let’s keep it equidistant for […]
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CALL CONDOR
This structure can simply be described as tying off the open ended risk involved in a Call Tree. In the earlier example of the 100/125/150 Call Tree, we would just buy an additional Call above our 2 short 125 and 150 Calls. Any strike above it would work, but let’s keep it equidistant for discussion […]
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PUT CONDOR
This structure can simply be described as tying off the open ended risk involved in a Put Tree. In the earlier example of the 125/100/75 Put Tree, we would just buy an additional Put below our 2 short 100 and 75 Puts. Any strike abelow it would work, but let’s keep it equidistant for discussion […]
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PUT TREE (Also called a Put Ladder)
A Put Tree is very similar to a Put Spread 1×2. The only real difference is instead of having 2 of the lower strike Put, that strike will be distributed among 2 strikes. For example: the 125/100 Put Spread 1×2 would now be changed to the 125/100/75 Put Tree. This structure still allows the buyer […]
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CALL TREE (Also called a Call Ladder)
A Call Tree is very similar to a Call Spread 1×2. The only real difference is instead of having 2 of the higher strike, that strike will be distributed among 2 strikes. For example: the 100/125 Call Spread 1×2 would now be changed to the 100/125/150 Call Tree. This structure still allows the buyer to […]
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PUT RATIO SPREAD 1×2
A traditional Put Ratio spread is very easy to define, but not quite as easy to understand. In simple terms, it is just a basic Put Spread with selling an extra Put to help finance the Put Spread. For example: the 125/100 Put 1×2 is Buy the 125 Put once to sell the 100 Put […]
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CALL RATIO SPREAD 1×2
A traditional Call Ratio spread is very easy to define, but not quite as easy to understand. In simple terms, it is just a basic Call Spread with selling an extra Call to help finance the Call Spread. AND BELOW IS OUR PROFIT AND LOSS GRAPH; For example: the 100/125 Call 1×2 is Buy the […]
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BEAR SPREAD (BUY PUT SPREAD or SELL CALL SPREAD)
A PUT spread is an options strategy in which equal number of Put option contracts are bought and sold simultaneously on the same underlying security but with different strike prices. Put spreads limit the option trader’s maximum loss at the expense of capping his potential profit at the same time. In simple terms, you pay […]
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BULL SPREAD (LONG CALL SPREAD or SHORT PUT SPREAD)
A Call Spread is an options strategy in which equal number of Call option contracts are bought and sold simultaneously on the same underlying security but with different strike prices. Call spreads limit the option trader’s maximum loss at the expense of capping his potential profit at the same time. In simple terms, you pay […]