Derivatives Trading in “Options”

Prof. Manoj Kumar

Email: profkumar@hotmail.com

Ph: +91 - 8826716123

Did you know?

There are ONLY FOUR BASIC types of Options Trading Strategies, and

Many other strategies can be developed based upon those FOUR BASIC STRATEGIES

Development of advanced options trading strategies

Would surely depend upon…

1. Your Proficiency Strategies are divided into following

categories of TRADERS, of course, based upon proficiency:

→ For NOVICE TRADERS

→ For INTERMEDIATE TRADERS

→ For ADVANCED TRADERS

→ For EXPERT TRADERS

1. Your Proficiency Strategies for NOVICE TRADERS:

→ Long Call

→ Long Put

→ Covered Call

→ Synthetic Call

→ Synthetic Put

1. Your Proficiency Example Strategies (out of some sixteen

appropriate) for INTERMEDIATE TRADERS:

→ Bear Call Spread…

→ Bull Put Spread….

→ Calendar Call…

→ Collar…

→ Diagonal Call…

→ Short Call Butterfly…

→ and more…

1. Your Proficiency Example Strategies (out of some twenty

appropriate) for ADVANCED TRADERS:

→ Bear Call Ladder…

→ Bull Put Ladder…

→ Calendar Put…

→ Call Ratio Backspread…

→ Long Call Condor…

→ Put Ratio Backspread…

→ Short Iron Butterfly…

→ and more…

1. Your Proficiency Example Strategies (out of some seventeen

appropriate) for EXPERT TRADERS:

→ Guts…

→ Long Put Synthetic Straddle…

→ Short Call Synthetic Straddle…

→ Strap…

→ Strip…

→ Modified Put Butterfly…

→ and more…

Important !!

All these strategies developed based upon

proficiency can be grouped together to

form further classifications…

2. Your Direction Second classification for development of

options strategies is DIRECTIONAL

based and are grouped accordingly

Bullish Strategies

Bearish Strategies

Direction Neutral Strategies

3. Volatility Third classification for development of

options strategies is VOLATILITY based

and are grouped accordingly

High Volatility Strategies

Low Volatility Strategies

4. Risk / Reward Fourth classification for development of

options strategies is RISK/REWARD

based and are grouped accordingly

Capped Risk Profile

Uncapped Risk Profile

Capped Reward Profile

Uncapped Reward Potential

4. Type Finally, some of the options strategies

are based on the types of benefits

traders are looking for:

Strategies that enable them to

“Capture A Regular Income”

Or, the strategies that are for

“Capital Gains”