Category: Options Trading

Diagonal Spreads

Diagonal spreads are an advanced options strategy. You could go either long or short with this strategy. It all depends on how you build the spread. It involves either two calls or two puts with different strikes and expiration dates. It’s a combination of a calendar and vertical spread. Watch our video on diagonal spreads…

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Options Strangles

Options strangles involve buying both a call and a put contract which includes same strike prices and expiration dates. You are looking for a big move in the underlying stock. The price of the stock needs to have a big move in either direction in order to profit. Strangles give you more room to profit…

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Options Straddles

Options straddles are an options trading strategy when you’re looking for a big move in either direction of the underlying stock. It involves buying a call and a put with the identical strike price and expiration date. If the price of the stock at its option expiration date is close to the option strike price,…

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Calendar Spreads

Calendar spreads are the combination of buying and selling two contracts with each having different expiration dates. With calendar spreads time decay is your friend. You can go either long or short with this strategy. It’s an excellent way to combine the benefits of directional trades and spreads. Watch our video on how to trade…

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Iron Butterflies

Iron butterflies are an aggressive neutral options trading strategy. The strikes are formed like a butterfly. It combines two calls, two puts, three strike prices and the expiration dates are all the same. You want price to expire at middle strike by expiration in order to profit, otherwise you’ll lose on the trade. It’s a…

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How to Trade Call Debit Spreads

Call debit spreads are a bullish directional options strategy. It requires doing a combination of buying a call and selling a call with the same expiration date. You would use this strategy instead of buying a naked call to help lower your break even cost. Choosing the right direction is important with this trading strategy….

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Call Credit Spreads Diagram

Call credit spreads are a bearish options selling strategy. They consist of selling a call to an options buyer then buying another call further out of the money for protection. The combination of selling and buying a call produces a net credit. If price expires below your short strike by expiration then you keep the…

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Put Debit Spreads

Put debit spreads are a bearish directional options strategy. It requires doing a combination of buying a put and selling a put with the same expiration date. You would use this strategy instead of buying a naked put to help lower your break even cost. Choosing the right direction is important with this trading strategy….

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Put Credit Spread

Put credit spreads are a bullish options selling strategy. They consist of selling a put to a put buyer then buying another put further out of the money for protection. The combination of selling and buying a put produces a net credit. If price expires below your short strike by expiration then you keep the…

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