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