Author: Smart Trader

Bear call spread

BySmart Trader August 18, 2022 0 Comments
Goal To profit from neutral to bearish price action in the underlying stock. A bear call spread consists of one short call with a lower strike price and one long call with a higher strike price. Both calls have the same underlying stock and the same expiration date. A bear call spread is established for a net credit (or net amount received) and profits from either a declining stock price or from...

Bull put spread

BySmart Trader August 20, 2021 0 Comments
This intermediate option trading strategy aims to profit from a neutral to slightly bullish price action in the underlying stock. A bull put spread consists of one short put at a higher strike price and one long put at a lower strike price. Both puts have the same underlying stock and the same expiration date. A bull put spread is established for a net credit (or net amount received) and profits...

Short Iron Butterfly spread

BySmart Trader April 4, 2021 0 Comments
The Short Iron Butterfly spread is a way to profit from neutral stock price action near the strike price of the short options (center strike) with limited risk. It is is a four-part strategy consisting of a bull put spread, and a bear call spread in which the short put and short call have the same strike price. All options have the same expiration date, and the three strike prices are...

Long Skip Strike Butterfly with Puts

BySmart Trader December 8, 2020 0 Comments
In the above example: Buy 1 Put strike 95 Sell 2 Puts strike 105 Buy 1 Put strike 110 The position may be established for a net debit or a net credit, depending on the bid-ask quotations, and both the potential profit and maximum risk are limited. Strike prices are equidistant, and all options have the same expiration month. Risk is limited to the net debit paid: after the trade is...

Long Skip Strike Butterfly With Calls

BySmart Trader December 1, 2020 0 Comments
In the above example: Buy 1 Call strike 95 Sell 2 Calls strike 100 Buy 1 Call strike 110 The position may be established for a net debit or a net credit, and both the potential profit and maximum risk are limited. Strike prices are equidistant, and all options have the same expiration month. Risk is limited to the net debit paid: after the trade is paid for, no additional margin is...

Christmas Tree Butterfly with Calls

BySmart Trader November 16, 2020 0 Comments
In the above example: Buy 1 Call strike 95 Sell 3 Calls strike 105 Buy 2 Calls strike 110 The position is established for a net debit, and both the potential profit and maximum risk are limited. Strike prices are equidistant, and all options have the same expiration month. Risk is limited to the net debit paid: after the trade is paid for, no additional margin is required. Bullish...