A type of order that allows an option trader to simultaneously buy or sell a number of different options that traditionally could only be achieved by placing separate orders. An option is a contract that gives the owner the right to buy or sell a security at a specific price within a specific time limit. The owner of an option contract is not obligated to exercise the option … [Read more...]
Short Straddle Option Trading Strategy
A short straddle is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premiums of the put and call, but it is risky if the underlying security's price goes up or down much. The deal breaks even if the intrinsic value of the put or the … [Read more...]
Option trading strategies – Straddle, Strangle and Gut
There are 3 simple option strategies .Straddle, Strangle and Gut. 1. Straddle is a volatile option strategy or what we call Market Neutral Strategy. Being market neutral means that a long Straddle profits no matter if the underlying asset goes up or down. Yes, a Long Straddle allows you to simply put on the position and then totally take your mind off the stock as you will … [Read more...]