option strategies

Option Strategy: Short Straddle

A Short straddle is a combination of writing uncovered Calls and puts, both with same strike price and expiration date. it is used when investor predicts narrow range for underlying stock. The strategy involves Selling a call option and a put option with the same expiration and strike price. Max loss in this strategy is unlimited, in either event (Selling call or put option) the loss is reduced by premium income received for selling options. Max gain is limited to the premium received from selling options. Breakeven points Upside Breakeven = Strike + Premium paid. Downside Breakev...
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Straddle Strategy: Long Straddle

Straddle is a market neutral strategy. it is a type of investment strategy undertaken by investors to make the profit from both increasing and decreasing price in the market. This option strategy accomplished by holding an equal number of puts and calls with the same strike price and expiration dates. Two types of straddle positions Long straddle and Short straddle. Long Straddle: A Long straddle is a way to profit, when investor expecting big price movement in the highly volatile market. This strategy consists of buying a call option and a put option with same strike price and expirat...
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Option strategies to know

Covered Call: Investors will use this strategy when they have a short-term position and neutral opinion on assets or looking to generate additional profit or protect against a decline in underlying assets. Married Put: This option strategy is used like an insurance policy to save against uncertain price decline of assets. Bull Call Spread: This type of strategy is used when an investor is bullish but expects a moderate rise in price. Read More about Option strategies.
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