#

Market Condition

Strategy

Mechanics

Features

1.

After a Market has had  Sizable Upward Move

Call Ratio Spreads

Buy one or more options and at the same time

Sell a larger number of options further out-of-the-money.

This strategy has a very wide profit zone and a high probability of profit.

2.

Protection against a Major Market Correction

Buy Underpriced Options to Protect Portfolios

Protect Your Trade with Free Insurance

Buy underpriced, out-of-the-money put options on the futures you own.

Buy out-of-the-money put options (to protect your position against a market crash). In addition, sell out-of-the-money calls to pay for the puts.

An excellent way to protect your holdings against a major market correction.

Protects your holdings against the risk of a market crash.

Sell an option and the same time buy another option of the same type (call or put) on the same underlying future and strike price, but with a further expiration.

Calendar (time) spreads take advantage of the time decay that increases as the expiration approaches.

4.

If you would like to predict the direction
of the markets

Buy Underpriced Options

Backspreads

In-the-Money Debit Spreads

Buy options with current market price less than its computed fair value (theoretical price), that do not expire for at least 30 to 60 days or more.

Sell one or more options and at the same time buy a larger number of options of the same underlying future that are further out-of-the-money (and less expensive).

Buy an in-the-money option and sell another option to help pay for it

The strategies will allow to risk less money, and at the same time give you a  statistical edge.

Good strategy when a large price move in a market is anticipated. This strategy is the exact opposite of Call Ratio Spreads.

If the price moves against you, you get out with a small loss, as long as you practice good money management.

If it moves the way you want it to, you can make profit all the way up to the strike price of the option you sold.

Sell one or more out-of-the-money call options and at the same time

Sell one or more out-of-the-money put options

Make money regardless of the direction of the market.  Very wide profit zone, with a high probability the price will stay in the profit zone. In addition, you can make adjustments, if necessary, to manipulate the profit zone.

6.

Market moves one way or another, or at least has a wide trading range

Buy a Straddle with Low Implied Volatility

Delta Neutral Trading

Buy at-the-money straddle (a put and a call at the same strike price). The options you buy should have at least 30-60 days remaining before expiration to minimize the time decay.

Initiate a position with a total position delta of zero or as close to zero as possible.

This is a safe and reliable strategy that provides a very relaxing (and profitable) way to trade. It can be used by almost anyone, and is especially well suited for small trader who wish to become large traders.

The strategies work well without having to pick the direction.