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Put Option Strategies for Smarter Trading: How to Protect and Build Capital in Turbulent Markets by Michael C. Thomsett

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5. Put Strategies for Spreads: Hedging for Profit

Using single options, either long or short, to create basic strategies involves many possible variations. Whether used to hedge other positions or simply to speculate, options trading based on one-contract strategies is widely popular. But when you go beyond this and begin thinking about the many ways to set up spreads, the options universe gets much larger and offers greater potential for leverage and profits.

Spreads—opening two or more option positions with different strikes, different expiration dates, or both—come in many varieties and present opportunities to use puts profitably. With emphasis on call-based spreads, puts are easily overlooked. However, it makes more sense to view calls ...

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