Series 7
Derivatives - Other Options Strategies
Other Bullish Options Strategies
Here are some other ways to take a bullish position using options:
- Writing covered calls above market: Your client buys the stock - at the current market price - required for physical delivery, and then holds it until the option is exercised. Let's say the current price is $100 and the exercise price is $105. As long as the stock exceeds that exercise price prior to the expiration date, your client will profit.
- Writing uncovered puts: Writing a put is a similar strategy to buying a call. Your client is betting the stock price will go up.
Bear strategies discussed earlier include buying puts and creating bear spreads. Here are some other ways to take a bearish position using options:
- Writing covered calls below market: Your client is betting the underlying stock price will drop below the strike price before the option is exercised.
- Writing uncovered calls: Writing a call is a similar strategy to buying a put. Your client is betting the stock price will go down.
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