Option Trading Strategies: Straddle, Strangle, Spread, Butterfly, Condor, Ratio Spread and Risk Reversal
Definition
A straddle is the purchase of a call combined with the purchase of a put at the same strike (generally purchased with both at-the-money).
A strangle is the purchase of a call combined with the purchase of a put at a lower strike (generally purchased with both out-of-the-money).
A spread is the purchase of one call (or put) and the sale of another at a worse strike to the buyer (generally out-of-the-money).
A butterfly spread is the purchase of a call (or put) (generally out-of-the-money) combined with the purchase of another call (or put) at a different strike (generally in-the-money) and the sale of two calls (or puts) at a mid-way ...
Get Key Financial Market Concepts, 2nd Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
