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Trading Ebook - Options - Strategy - Poster
Trading Ebook - Options - Strategy - Poster
ASX Options
Clever products for clever investors
BULL STRATEGIES
Overall, these positions will do better if
the stock or index market rises.
NEUTRAL STRATEGIES
BEAR STRATEGIES
Overall, these positions will do better if the stock or index market does not move very much.
Synthetic Long
Long Butterfly
Short Straddle
Synthetic Short
Example:
Buy 1 Call and Sell 1 Put at the same strike
Market Outlook: Bullish
Risk:
Substantial
Reward:
Unlimited
Increase in Volatility: Neutral
Time Decay:
Neutral
Example:
Sell 2 Calls, Buy 1 Call at higher strike and
Buy 1 Call at lower strike
Market Outlook: Neutral
Risk:
Limited
Reward:
Limited
Increase in Volatility: Typically hurts position
Time Decay:
Typically helps position
Example:
Sell 1 Call and Sell 1 Put at the same strike
Market Outlook: Neutral
Risk:
Unlimited
Reward:
Limited
Increase in Volatility: Hurts position
Time Decay:
Helps position
Example:
Buy 1 Put and Sell 1 Call at the same strike
Market Outlook: Bearish
Risk:
Unlimited
Reward:
Substantial
Increase in Volatility: Neutral
Time Decay:
Neutral
Contracts Traded
16,000,000
Index Points
4000
Retail option
courses commenced
14,000,000
Margin lending
as collateral
87 market correction
10,000,000
2500
8,000,000
2000
6,000,000
1500
4,000,000
Automated trading
introduced CLICK
2,000,000
O/seas market
makers introduced
1000
Example:
Buy 1 Put
Market Outlook: Bearish
Risk:
Limited
Reward:
Substantial
Increase in Volatility: Helps position
Time Decay:
Hurts position
500
0
75/76
76/77
77/78
78/79
79/80
80/81
81/82
82/83
83/84
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
Call Backspread
3500
3000
12,000,000
Example:
Buy 1 Call
Market Outlook: Bullish
Risk:
Limited
Reward:
Unlimited
Increase in Volatility: Helps position
Time Decay:
Hurts position
Long Put
Options Volume
Put Backspread
Bullish
Buy Write
Example:
Buy 1000 shares and Sell 1 Call
Market Outlook: Neutral to Slightly Bullish
Risk:
Substantial
Reward:
Limited
Increase in Volatility: Hurts position
Time Decay:
Helps position
Bearish
write
straddles or
combinations
Bull Spread
Example:
Buy 1 Call (Put) and Sell 1 Call (Put) at higher
strike
Market Outlook: Moderately Bullish
Risk:
Limited
Reward:
Limited
Increase in Volatility or Time Decay:
Helps or hurts depending on strikes chosen
Neutral
bull
spreads
buy stock, sell call
buy bonds, sell put
buy call
Short Butterfly
Example:
Buy 2 Puts, Sell 1 Put at higher strike and
Sell 1 Put at lower strike
Market Outlook: Strong move in either direction
Risk:
Limited
Reward:
Limited
Increase in Volatility: Typically helps position
Time Decay:
Typically hurts position
Example:
Sell 1 Put and Buy 2 Puts at a lower strike
Market Outlook: Bearish
Risk:
Limited
Reward:
Substantial
Increase in Volatility: Typically helps position
Time Decay:
Typically hurts position
Bear Spread
bear
spreads
overwrite
buy protective put
buy put
Long Straddle
Example:
Buy 1 Call and Buy 1 Put at the same strike
Market Outlook: Strong move in either direction
Risk:
Limited
Reward:
Unlimited
Increase in Volatility: Helps position
Time Decay:
Hurts position
Example:
Sell 1 Put (Call) and Buy 1 Put (Call) at higher
strike
Market Outlook: Moderately Bearish
Risk:
Limited
Reward:
Limited
Increase in Volatility or Time Decay:
Helps or Hurts depending on strikes chosen
Short Call
Example:
Sell 1 Call
Market Outlook: Neutral to Slightly Bearish
Risk:
Unlimited
Reward:
Limited
Increase in Volatility: Hurts position
Time Decay:
Helps position
Supplied by ASX Options Business Development. Visit asx.com.au/options or call 1300 300 279 for more information on the range
of courses available to both investors and brokers. Options courses are accredited for both structured & unstructured CPD points.
Information provided by ASX does not constitute advice or recommendation of a particular product or class of product and investors should consider obtaining independent advice before making any financial decisions. ABN 98 008 624 691