: Selling a call and buying a higher-strike call for a net credit, ideal for "sideways-to-down" markets. 3. Neutral and Income-Generating Strategies
: Buying a call and selling a higher-strike call to lower the cost of entry.
: A more cost-effective version of the straddle using out-of-the-money options. 5. Advanced Exotic and Ratio Spreads
: A high-reward, low-risk trade centered around a specific target price.
: Using spreads to control large blocks of stock with minimal collateral. Summary Table: Strategy Selection Market Outlook Recommended Category Example Strategy Strongly Bullish Bullish Spreads / Long Calls Bull Call Spread Slightly Bearish Credit Spreads Bear Call Spread Rangebound Income Strategies Iron Condor High Volatility Volatility Long Long Straddle
: Buying a certain number of options and selling a larger number of further out-of-the-money options.
: A credit strategy where you sell a put and buy a lower-strike put, profiting from time decay and rising prices. 2. Directional Bearish Strategies
: Learning how to "hedge" existing positions using complex spreads.