Advanced Options Strategies
Advanced options strategies provide income, hedge risk, and profit in any market condition.
Multi-Leg Strategies
Credit Spreads
Bull Put Spread- Sell put at higher strike
- Buy put at lower strike
- Collect net premium
- Max loss = spread width minus premium
- Bullish/neutral outlook
- Sell call at lower strike
- Buy call at higher strike
- Collect net premium
- Bearish/neutral outlook
Iron Condor
- Sell put spread + sell call spread
- Profit in range-bound markets
- Defined max risk
- Collect premium from both sides
Butterfly Spread
- Three strike prices
- Profit at specific price target
- Low cost, defined risk
- Best near expiration
Income Strategies
The Wheel Strategy
- Sell cash-secured puts on stock you want
- If assigned, own stock at lower cost
- Sell covered calls on shares owned
- If called away, restart process
- Collect premium continuously
Iron Condor Income
- Sell monthly iron condors
- 70-80% probability of profit
- Defined risk
- Consistent monthly income
Hedging with Options
Protective Collar
- Own stock + buy put + sell call
- Limits downside
- Caps upside
- Low or zero cost
Portfolio Hedge
- Buy SPY or QQQ puts
- Protects against market crash
- Cost of insurance (premium)
- Sleep better at night
Greeks Management
Delta Management
- Keep portfolio delta near neutral
- Hedge directional risk
- Adjust as price moves
Theta Harvesting
- Be net theta positive
- Time working for you
- Most premium decays last 30 days
Risk Rules
- Never naked sell options as beginner
- Always know maximum loss
- Size positions at 3-5% of portfolio
- Close losers at defined exit points
- Take profits at 50% of max profit