: Combines a long stock position with a long put option to create a "floor" for potential losses. It acts as an insurance policy for your existing holdings. 2. Volatility Strategies (Non-Directional)
: Used when you are bearish . You buy a put option expecting the stock price to fall significantly. option buying strategies
: Used when you are bullish . You buy a call option expecting the stock price to rise significantly above the strike price plus premium. : Combines a long stock position with a
: Buy a lower-strike call and sell a higher-strike call. This reduces the net premium paid and lowers the break-even point. Volatility Strategies (Non-Directional) : Used when you are
Spreads help manage risk by simultaneously selling another option to offset the cost of the one you bought.
: Similar to a straddle, but you buy out-of-the-money (OTM) calls and puts. This is cheaper to enter than a straddle but requires a larger price swing to reach profitability. 3. Advanced Buying & Spread Strategies
: Buy a higher-strike put and sell a lower-strike put. It limits both potential loss and reward while making the trade more cost-effective.