Simple nifty trading strategy

This strategy profits if the underlying stock is outside the wings of the iron butterfly at expiration. This strategy consists of buying puts as a means to profit if the stock price moves lower. It is a candidate for bearish investors who want to participate in an anticipated downturn, but without the risk and inconveniences of selling the stock short.

If the stock remains steady or rises during the life of the near-term option, it will expire worthless and leave the investor owning the longer-term option. This strategy profits if the underlying security is between the two short put strikes at expiration. The initial cost to initiate this strategy is rather low, and may even earn a credit, but the upside potential is unlimited.

The basic concept is for the total delta of the two long calls to roughly equal the delta of the single short call. If the underlying stock only moves a little, the change in value of the option position will be limited. But if the stock rises enough to where the total delta of the two long calls approaches the strategy acts like a long stock position. The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.

The basic concept is for the total delta of the two long puts to roughly equal the delta of the single short put. But if the stock declines enough to where the total delta of the two long puts approaches the strategy acts like a short stock position.

A Journey of Price Action Trading

This strategy is simple. It consists of acquiring stock in anticipation of rising prices.

The gains, if there are any, are realized only when the asset is sold. Until that time, the investor faces the possibility of partial or total loss of the investment, should the stock lose value. In principle, this strategy imposes no fixed timeline. However, special circumstances could delay or accelerate an exit. For example, a margin purchase is subject to margin calls at any time, which could force a quick sale unexpectedly. This strategy consists of buying a call option and a put option with the same strike price and expiration.

The combination generally profits if the stock price moves sharply in either direction during the life of the options. This strategy profits if the stock price moves sharply in either direction during the life of the option. This strategy consists of writing an uncovered call option.

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It profits if the stock price holds steady or declines, and does best if the option expires worthless. A naked put involves writing a put option without the reserved cash on hand to purchase the underlying stock. This strategy entails a great deal of risk and relies on a steady or rising stock price. It does best if the option expires worthless. This strategy consists of adding a long put position to a long stock position. If the stock keeps rising, the investor benefits from the upside gains.

Yet no matter how low the stock might fall, the investor can exercise the put to liquidate the stock at the strike price. This strategy profits if the underlying stock is outside the wings of the butterfly at expiration. This strategy profits from the different characteristics of near and longer-term call options.

If the stock holds steady, the strategy suffers from time decay.

If the underlying stock moves sharply up or down, both options will move toward their intrinsic value or zero, thus narrowing the difference between their values. If both options have the same strike price, the strategy will always receive a premium when initiating the position. This strategy profits if the underlying stock is inside the wings of the iron butterfly at expiration.

This strategy profits from the different characteristics of near and longer-term put options. If the underlying stock holds steady, the strategy suffers from time decay. If the stock moves sharply up or down, both options will move toward their intrinsic value or zero, thus narrowing the difference between their values. The strategy involves borrowing stock through the brokerage firm and selling the shares in the marketplace at the prevailing price.

The goal is to buy them back later at a lower price, thereby locking in a profit. This strategy involves selling a call option and a put option with the same expiration and strike price. It generally profits if the stock price and volatility remain steady. This strategy profits if the stock price and volatility remain steady during the life of the options. This strategy can profit from a steady stock price, or from a falling implied volatility.

The actual behavior of the strategy depends largely on the delta, theta and Vega of the combined position as well as whether a debit is paid or a credit received when initiating the position. This strategy can profit from a slightly falling stock price, or from a rising stock price. The actual behavior of the strategy depends largely on the delta, theta and vega of the combined position as well as whether a debit is paid or a credit received when initiating the position.

This strategy combines a long call and a short stock position. The strategy profits if the stock price moves lower—the more dramatically, the better. The time horizon is limited to the life of the option. If you do not squareoff your position till last day of expiry then exchange will square-off the position and settle the cantract.

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