To understand various option strategies that can be used given a bullish outlook. When an investor believes individual stocks or the markets are headed higher there are numerous ways to implement option strategies to benefit from this outlook. This course will cover the risks and potential rewards of a few of these strategies.
Intermediate and Advanced students
"Options Strategies in a Bullish Market" has been designed to illustrate some of the most common strategies to take advantage of a bull market. This course, which explores option strategies in a bull market, is the first in a series designed to help you identify what may be an appropriate strategy in specific market environments, why you use options, and potential risks or rewards they offer. At the completion of the chapters and prior to the final quiz the student should know and understand all of the components in the conclusion.
In the introduction an overview of strategies is given along with how these strategies can differ in terms of difficulty to understand and their risk / reward profiles.
This chapter covers buying calls as a bullish strategy. The topics covered in this chapter include the sell vs. exercise decision, figuring actual return, the stock price option price relationship, and the components that make buying calls an effective strategy in a bull market.
In this chapter LEAPS®, or Long Term Equity AnticiPation Securities are introduced as another tool in order to take advantage of a specific market. LEAPS® allow the investor to use options that expire further out in time than regular cycle options.
For this chapter selling puts is explained and illustrated for the student. Unlike chapter 2 which involved buying calls this chapter discusses selling puts and the ramifications for a short position including maximum gain, loss potential, and early exercise.
This chapter discusses the purchase of puts in order to hedge a stock position. The concept behind hedging a stock position with puts is explained. It is further explained how a hedged put can be traded either independently of the stock purchase, or simultaneously as a married put.
In this chapter the use of selling calls while maintaining or introducing a long stock position are explained. The benefits of stock ownership in a bull market are described and the tertiary ability to sell calls and collect premium are described.
Bull market spreads are introduced in this chapter. The two types of bull market spreads introduced are the bull call spread and the bull put spread. These two types of spreads are compared and the differences of the spreads are explained. The correct decisions that go into making a bull spread a profitable trade are also explained. In addition the factors effecting spread values are explained along with maximum gain and maximum loss.
Review of key topics and final quiz.
OIC341P: Income Strategies Part 1
OIC342P: Income Strategies Part 2
Questions about anything options-related?
Call or chat with an options
professional now.
Questions about anything options-related?
Chat with an options professional now.
Questions about anything options-related?
Email an options professional now.
This web site discusses exchange-traded options issued by The Options Clearing Corporation. No statement in this web site is to be construed as a recommendation to purchase or sell a security, or to provide investment advice. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500 Chicago, IL 60606 (1- 800-678-4667).
© 1998-2013 The Options Industry Council - All rights reserved. Please view our Privacy Policy and our User Agreement.
