Did this more for myself to get straight in my head
Covered call = long stock, short call = return enhancer, caps upside
Protective put = long stock, long put = insurance on downside moves
bull spread = long call, short call. since bullish, buy the lower strike call, sell higher strike call.
bear spread = long put, short put. since bearish, buy higher strike put, sell lower strike put
butterfly - can be long or short. Long is to buy the outside calls (1 each) sell 2 of the inside calls...profits with little volatility. has 2 breakevens.
straddle = long call, long put with equal strikes and time to maturity. profits w/ high volatility. Costly...big bet on some move, no idea which way. Think lawsuit or FDA approval pending.
box spread = riskless = bull spread + bear spread = risk free rate if all options are priced right. No loss possible, no breakeven.
Collar = long stock, sell call at highers strike (cap upside), long put with lower stike (cap downside). Look for offsetting premiums to make no cost up front. Sleep tight that the position will end up somewhere between the 2 strikes作者: Unforseen 时间: 2011-7-13 15:44
long Butterfly looks like a pine cone
Short Butterfly looks like a toilet bowl作者: pennyless 时间: 2011-7-13 15:44
In which situations will these options strategies be appropriate respectively?
