Part 4 Learn Institutional TradingIntermediate Option Strategies
Straddle – Buy Call + Buy Put (same strike/expiry). Best for high volatility.
Strangle – Buy OTM Call + Buy OTM Put. Cheaper than straddle.
Bull Call Spread – Buy lower strike call + Sell higher strike call.
Bear Put Spread – Buy higher strike put + Sell lower strike put.
Advanced Option Strategies
Iron Condor – Sell OTM call + OTM put, hedge with farther strikes. Good for sideways market.
Butterfly Spread – Combination of multiple calls/puts to profit from low volatility.
Calendar Spread – Buy long-term option, sell short-term option (same strike).
Ratio Spread – Sell multiple options against fewer long options.
Hedging with Options
Options aren’t just for speculation; they’re powerful hedging tools.
Portfolio Hedge: If you own a basket of stocks, buying index puts protects against a market crash.
Currency Hedge: Importers/exporters use currency options to lock exchange rates.
Commodity Hedge: Farmers hedge crops using options to lock minimum prices.
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