There are many strategies you can adopt with options, depending on whether you think the underlying assets or the market is likely to rise, fall or remain steady. These perspectives can be broadly grouped into bullish, bearish or neutral strategies.
Bullish strategies do better in a rising market. They usually involve buying call options and selling put options to benefit from increasing asset prices.
- Long call
- Bull spread
- Protected covered write or collar
- Ratio call spread
- Stock repair
- Protected put
Bearish strategies work best in falling markets. Bearish strategies generally rely on buying put options to lock in selling prices as asset prices decrease.
Neutral strategies work best in stagnant markets. They often involve balancing the purchase and sale of both call and put options to take advantage of any changes in underlying asset prices.
Strategies for price breakouts
View a summary of the most commonly used strategies for various market conditions.