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

PART THREE

Spread Strategies

So far, this book has provided a solid foundation in option fundamentals and has described the four basic option strategies of a long call, a long put, a short call, and a short put. Now it is time to apply what you have learned to more advanced strategies. Part Three includes Chapters 11 to 22 and covers spread strategies. This is an important part of your option knowledge development because this part can help you progress to the next level of trading knowledge and proficiency. Chapter 11 describes a vertical spread, a common and basic spread strategy, and subsequent chapters describe more complex spread strategies. Included in Part Three is a vertical spread, iron condor, ratio (front) spread, backspread, straddle, strangle, butterfly, condor, calendar spread, diagonal spread, covered call, combination, collar, and covered combination, and other strategies. Each example is given in a similar format to make it easier for you to compare one strategy to another. A separate chapter is devoted to the most important spread strategies so that you can fully understand them before you move forward in later chapters to strategies on ETFs, indexes, and stock index futures.

The assumptions in Part Two also apply to Part Three. As in Part Two, to make it easy to compare one strategy to another, examples in Part Three, Chapters 11 to 22, are presented in a consistent format. Each example is comprehensive and typically includes a strategy summary, a table showing ...