Advanced Options Strategies

Advanced options strategies provide income, hedge risk, and profit in any market condition.

Multi-Leg Strategies


Credit Spreads

• 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

1. Sell cash-secured puts on stock you want
2. If assigned, own stock at lower cost
3. Sell covered calls on shares owned
4. If called away, restart process
5. 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

1. Never naked sell options as beginner
2. Always know maximum loss
3. Size positions at 3-5% of portfolio
4. Close losers at defined exit points
5. Take profits at 50% of max profit