The Complete Guide to Option Strategies: Advanced and Basic Strategies on Stocks, ETFs, Indexes, and Stock Indexes

APPENDIX C

Strategies at a Glance—Stock Index Futures

Appendix C presents strategies at a glance for stock index futures. The first line is intended to state a forecast and is followed, on the same line, by a strategy that fits that view; the second line states an assumption regarding the level of a future index; and the remaining line or lines describe the option strategy. A similar approach is used in Appendix A, regarding ETFs, and in Appendix B, regarding indexes. These strategies are intended to provide a working knowledge of how options work and are not recommendations. Each strategy assumes that the option position is established in January of the current year.

BULLISH STOCK INDEX FUTURES STRATEGIES

Long Call (Chapter 7)

Bullish on market; deep-in-the-money long call.

S&P 500 futures at 1,500.

Buy one S&P 500 futures March 1,400 call.

Bullish on market; slightly-in-the-money long call.

S&P 500 futures at 1,500.

Buy one S&P 500 futures March 1,450 call.

Bullish on market; at-the-money long call.

S&P 500 futures at 1,500.

Buy one S&P 500 futures March 1,500 call.

Bullish on market; slightly-out-of-the-money long call.

S&P 500 futures at 1,500.

Buy one S&P 500 futures March 1,550 call.

Bullish on market; far-out-of-the-money long call.

S&P 500 futures at 1,500.

Buy one S&P 500 futures March 1,600 call.

Bullish on blue chips; slightly-in-the-money long call.

Dow Jones Industrial Average futures (DJ) at 14,000.

Buy one DJ March 13,500 call.

Bullish on market; far-out-of-the-money ...