Options strategy library

Options can be used in isolation, or in combination with other options or with stock to construct a wide range of strategies. The discussion of each strategy covers:

  • How the strategy is constructed
  • The market outlook for which the strategy may be appropriate
  • Potential profits and losses
  • Follow-up action required
  • The effect on the strategy of time decay and changes in volatility

An example of each strategy is also included.

ASX also produces a poster with a summary of the most widely used strategies for various different market conditions. You can download a poster (PDF 100KB).

Bullish strategies

Bearish strategies

Neutral strategies

Strategies for price breakouts


Tailor made combinations

Since the introduction of Tailor Made Combinations (TMC), combination orders now automatically interact with the individual component series. This increases the chance these orders will be exectued at the best possible in total.

Other strategies

These strategies appeared in the ASX Investor Update email newsletter.  To subscribe to this newsletter please register with the MyASX section or visit the About MyASX page for more details.


2006

2005

 
Options Strategy Archive

The Strategy Library is not intended to cover every possible options strategy, but to explain the more popular strategies. It is assumed that you are familiar with option pricing fundamentals, and the concepts of delta and time decay. For explanation of basic option concepts and pricing fundamentals, please refer to the What are etos section. Note that for the purpose of simplicity, transaction costs, tax considerations and the cost of funding are not included in the examples.

Disclaimer 
The information contained in these webpages is for educational purposes only and does not constitute financial product advice. ASX does not represent or warrant that the information is complete or accurate. You should consider obtaining independent advice before making any financial decisions. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of this material is accepted by ASX.