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.
Other Bearish Options Strategies
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.
Neutral strategies (discussed earlier) include creating straddles and combinations. Another way to take a neutral position is to write covered calls at market.
Long Term Equity Anticipation Securities (LEAPS)
TradingA brief overview of how to profit from using put options in your portfolio.
TradingA brief overview of how to provide from using call options in your portfolio.
TradingWhile writing a covered call option is less risky than writing a naked call option, the strategy is not entirely riskfree.
TradingThe adage "know thyself"--and thy risk tolerance, thy underlying, and thy markets--applies to options trading if you want it to do it profitably.
TradingCovered calls may require more attention than bonds or mutual funds, but the payoffs can be worth the trouble.
TradingA good place to start with options is writing these contracts against shares you already own.
TradingBull spread option strategies, such as a bull call spread strategy, are hedging strategies for traders to take a bullish view while reducing risk.
TradingLearn how this simple options contract can work for you, even when your stock isn't.
TradingLearn how to buy calls and then sell or exercise them to earn a profit.
InvestingThere are times when an investor shouldn't exercise an option. Find out when to hold and when to fold.