Im sure its a dumb question but I have been searching around for a while now trying to find every single option spread out there that people trade and I have come to the conclusion that in reality there is only just a handful of actual option strategies and a million different variations of those strategies.........does this seem correct? I mean it seems like you have the following base strategies: call and put spreads (verticals), butterflies, straddles, strangles, ratio spreads, back spreads, calenders and everything else is just a derivative of those base strategies. Thoughts? Or am I wrong?
You can either buy or sell a call or buy or sell a put. Between those 4 separate possible actions and the myriad combinations of those actions in different numbers. ratios, months and strikes you get unlimited strategies so to speak. Just like only 8 notes of music but unlimited music.
optioncoach Very good answer, however what if we are talking about options in just 1 month? Then isn't basically every strategy based on the above base strategies? Thanks
Sounds like the training materials on cboe.com would be of interest to you. It is all free and will give you a good foundation on how various option strategies work.
You are all wrong⦠There is only two variable: future price and voltyâ¦the rest is secondary. In simple sport betting terms , if one can establish a 55/45 record , he will be a winner in both straight and parley bets
Actually there really is no difference between calls and puts you're either long options or short options and the associated risks. Quote from Roy Neff... "a call is a put and a put is a call"
Absolutely ALL strategies are combinations of: Long call Short call Long put Short put Long stock (or future) Short stock (or future)