The 7 Most Popular Options Trading Strategies Explained
You Can Use Options Weekly Paychecks Systems & Strategies with The Following Options Combination Strategies Below to Take Your Options Trading to New Levels!
There are many different strategies that options traders can employ. We will explore 7 of the most popular strategies used by both beginner and advanced options traders. Understanding these different approaches is an important first step for anyone looking to start trading options.
Covered Calls:
One of the simplest options strategies is writing covered calls. This involves selling call options against shares of a stock already owned in your portfolio. It generates income from the option premiums collected but caps upside potential if the stock rises significantly.
Cash Secured Puts:
Similar to covered calls, cash secured puts allows you to generate income by writing put options as long as you have enough cash in your account to cover purchasing the stock if it is put to you. This can be a good way to buy stocks at a discounted price.
Bull Call Spreads:
A bull call spread is a limited risk strategy using calls to profit from an uptrend. It involves buying a further out of the money call while offsetting the cost by selling a closer to the money call. Profits are had if the stock rises above the short call strike.
Bear Put Spreads:
The put version of a bull call spread, a bear put spread profits when a stock falls. It uses a debit to enter as puts are bought and sold at different strike prices below the current stock price.
Straddles and Strangles:
These non-directional plays use a combination of puts and calls at the same (straddle) or different (strangle) strike prices in anticipation of increased volatility. They profit big on large moves but lose value if the stock stalls.
Iron Condor:
An iron condor is a low risk strategy using a combo of call and put credit spreads. It profits as the stock stays within the spread’s boundary strikes. The max reward is limited but so is max risk.
The Wheel Strategy:
A hybrid strategy combining covered calls and cash secured puts for consistent income in sideways or downward trending markets. Once assigned stock, covered calls are sold to generate more premiums.
Key to options success is to know how to use options in a practical way. Unfortunately most options education takes people down a never ending path of complicated garbely gook leaving those options traders not knowing how to enter and exit in real time while not offering clarity on what options to choose.
Check out http://optionsweeklypaychecks.com/options-trading-101-learn-options-trading-fast/