by Rajat Sharma | Aug 9, 2014 | equity, option strategy, stocks |
When to use: Bull Call Spread Strategy is used when the investor believes that the stock will rise in future (i.e. the investor is bullish on the stock). How it works: In a Bull Call Spread Option you buy 1 in-the-money call option and sell 1 out-of-the-money call...
by Rajat Sharma | Aug 9, 2014 | equity, option strategy, stocks |
When to use: Bull Put Spread strategy is used when the investor believes that the stock/index price will rise in future or at best it will trade in a tight range, i.e. the investor is bullish on the stock/index. How it works: In a Bull Put Spread strategy the investor...
by Rajat Sharma | Aug 9, 2014 | equity, option strategy, stocks |
When to use: Bear Call Spread Strategy is used when the investor believes that the stock price will fall in future or at best, it will remain range bound i.e. the investor is bearish on the stock. How it works: In a bear call spread option the investor buys...
by Rajat Sharma | Jul 19, 2014 | equity, option strategy, stocks |
When to use: Collar Option Strategy is used when the investor writes a covered call to earn a premium but wants to protect himself from an unexpected sharp fall in the price of the underlying securities. In this strategy, your risk from a downside in the stock price...
by Rajat Sharma | Jul 19, 2014 | equity, option strategy, stocks |
When to use: When you are Bullish and anticipate the stock / index to rise. How it works: Long Combo Option Strategy uses two option contracts with the same expiry date but different strike prices. In this strategy, you sell/write 1 out-of-the-money put option; and...
by Rajat Sharma | Jul 19, 2014 | equity, option strategy, stocks |
Buy shares and sell a call option of an equal number of shares. The covered call option strategy is also called “Buy write” strategy. When to use the covered call option strategy: When you are neutral (or moderately bullish) on the short term direction of the...
