Many times traders jump into the game of options trading without knowing how exactly options trading works. Options trading is the great way to make consistent profits in the trade market.
But for that, you need to follow best option trading strategy. There are various trading strategy used by the traders to make profits. Today, we will look at the best options trading strategies.
In this option strategy, trader purchases the assets outright and simultaneously sell the call option to someone on those same assets. This strategy is used when traders have a short-term position on the assets.
This strategy is used when investors are bullish on the asset price. In this strategy, put options are purchased by the investors for particular shares. Married put strategy is used to avoid short-term losses.
Bull call spread
In this strategy, the investor buys call options at a specific strike price and simultaneously sells the same number of call options at higher strike prices. This strategy is used when the trader is bullish.
This is the relatively complex trading strategy. In this strategy, an investor holds a short and long position in two different strangle strategies. Four different options with four different strike prices are purchased and sold. But all the options have the same expiry date. Iron condor option strategy is used when the trader is looking for making a limited but consistent profit.
These are the four most commonly used options trading strategy. Apart from this traders also use bear put spread, short iron butterfly, protective collar and other trading strategies to make the profit in the stock market.
If you are new to the world of stock market, you can use these option trading strategies. You can also navigate to this website to know more about the option trading strategies.