Some Options Strategies You Should Know After Markets Soar
There are several options strategies that traders can use after a market Soar:
Covered Call: This is a strategy where an investor holds a long stock position and sells call options on the same stock. This generates income while also capping the upside potential of the stock.
Bull Call Spread: This strategy involves buying a call option at a lower strike price and selling a call option at a higher strike price. This strategy can benefit from a market rally but also limits the potential loss.
Protective Put: This strategy involves buying both a stock and a put option on the same stock. This provides protection in case of a market decline and also allows for profits if the market continues to rally.
Calendar Spread: This strategy involves selling a near-term option and buying a longer-term option with the same strike price. This can benefit from time decay and a potential market rally.
Iron Butterfly: This strategy involves selling two at-the-money options, buying one in-the-money option and one out-of-the-money option. This is a neutral strategy that can benefit from a market rally, as long as the market remains within a certain range.
It's important to note that these strategies come with various levels of risk and potential reward and it is important to understand the risks involved before implementing any strategy. Additionally, these strategies may be better suited for some individuals and market conditions than others, so it is important to do thorough research and consult with a financial advisor before making investment decisions.
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Will still be a passive investor for quite a while here