Open an Account | Log-In | Register | Toll-Free: 1-800-621-1414 | Direct: 312-277-0050

Free e-booklet: The Tax Treatment of Commodity Futures and Futures Options
 

  Options Only Common Strategies

STRATEGY

STRATEGY STRUCTURE - BUY PERSPECTIVE
(Sequence that the strategy must always be created)

Call Spread

Buy call, sell any call (same month) at higher strike.

Put Spread

Buy put, sell any put (same month) lower strike.

Combo

Sell call, buy put at lower strike.

Straddle

Buy put, buy call at same strike.

Strangle

Buy put, buy call at higher strike.

Guts

Buy call, buy put at higher strike.

Call Butterfly

Buy call, sell two calls at higher strikes, buy call at a higher strike.  (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Put Butterfly

Buy put, sell two puts at higher strikes, buy put at a higher strike.  (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Condor

Buy put (call), sell put (call) at two even higher strikes, buy put (call) at yet higher strike.  (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Iron Butterfly

Buy the straddle, sell the strangle.  This must be entered in the following sequence, which equates to the same: sell put, buy put and call at higher strike, sell call at a higher strike. (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Iron Condor

Sell put, buy put at higher strike, buy call at even higher strike, sell call at even higher strike. (All series in the same expiry month.)

Call Strip

Buy between three and eight calls.  (The strikes and expiry months do not need to be the same but strikes and expiry months must be entered in ascending order.)

Put Strip

Buy between three and eight puts.  (The strikes and expiry months do not need to be the same but strikes and expiry months must be entered in ascending order.)

Call Calendar Spread

Sell near month call, buy far month call (same strikes across the two months).

Put Calendar Spread

Sell near month put, buy far month put (same strikes across the two months).

Call Diagonal Calendar Spread

Sell near month call, buy any far month call at a different strike.

Put Diagonal Calendar Spread

Sell near month put, buy any far month put at a different strike

Straddle Calendar Spread

Sell Straddle in near month, buy Straddle in far month at same strike.  (Sell near month put, sell near month call, buy far put, buy far call.)

Diagonal Straddle Calendar Spread

Sell Straddle in near month, buy Straddle in far month at different strike: sell near month put, sell near month call, buy far month put, buy far month call.

Jelly Roll

Sell call, buy put at same strike in near month, buy call, sell put at same strike in far month.  (Strike price in far month need not equal strike price in near month.)

Straddle Strip

Buy between two and four straddles in one or more expiry months.  (Must be entered as buy call, buy put with strikes and expiry months entered in ascending order.)

Box

Buy call and sell put, buy put and sell call at higher strike.

2x1 Ratio Call Spread

Sell call, buy two calls at higher strike.

2x1 Ratio Put Spread

Sell put, buy two puts at lower strike.

Call Ladder

Buy call, sell call at higher strike, sell call at even higher strike.  (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Put Ladder

Sell put, sell put at higher strike, buy put at even higher strike.  (The strikes do not have to be consecutive and the gaps between them do not have to be equal.)

Synthetic Underlying

This is a standard conversion/reversal strategy but without the Underlying leg.  Reversal: buy a call, sell a put at the same strike.  To trade a Conversion the order must be entered in the same sequence as above, but submitted to the market as a sell/offer order.

3 Way: Buy a Call spread versus a Put

Buy a Call spread versus selling a put: buy a call, sell a call at a higher strike, sell a put at any strike.

3 Way: Buy a Put spread versus a Call

Buy a Put spread versus selling a call: buy a put, sell a put at a lower strike, sell a call at any strike.

3 Way: Straddle versus a Call

Buy a Straddle versus selling a call: buy a put and call at the same strike, as well as selling a call at any strike.

3 Way: Straddle versus a Put

Buy a Straddle versus selling a put: buy the straddle (i.e. buy a put and call at the same strike), as well as selling a put at any strike.

 



Home | Contact Us | Account Forms & Funding Information | Terms, Conditions & Policies | Privacy Notice

Copyright 2008 Zaner Group LLC, All Rights Reserved.
150 South Wacker Drive, Suite 2350 | Chicago, Illinois USA | 60606
1-800-621-1414 or 312-277-0050

Registered with: CFTC
Member of: National Futures Association, National Introducing Brokers Association, Better Business Bureau, Illinois Chamber of Commerce


Futures, forex and options trading involves risk of loss. Click here for complete risk disclosure statement.