16 popular options trading strategies in Hong Kong

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The Bullish Strategy

A bullish strategy is where the trader expects the underlying asset’s price to rise. There are numerous ways to execute a bullish strategy, but some standard methods include buying calls or stocks.

The Bearish Strategy

A bearish strategy is where the trader expects the underlying asset’s price to fall. There are scores of different ways to execute a bearish strategy, but some standard methods include selling calls or shorting stocks.

The Long Position

When a trader buys an asset and holds it expects that its price will rise. They can establish a long position by buying an asset outright or a call option.

The Short Position

A short position is when traders sell an asset and hold it to expect its price to fall. They can establish a short position by selling an asset outright or selling a put option.

The Naked Option

A naked option is an option contract traded without owning the underlying asset. This type of trade is typically considered high risk, as the trader has no protection in the event of a price move in the underlying asset.

The Covered Option

A covered option is an option contract traded while owning the underlying asset. This type of trade protects in the event of a price move in the underlying asset, as the trader can sell the asset if the option is exercised.

The Long Call

A long call is an options strategy where the trader buys a call option with the expectation that the underlying asset’s price will rise. If the underlying asset price rises above the call option’s strike price, this strategy profits.

The Short Call

It is an options strategy where the trader sells a call option with the expectation that the underlying asset’s price will fall. If the underlying asset price falls below the call option’s strike price, this strategy profits.

The Long Put

A long put is an options strategy where the trader buys a put option with the expectation that the underlying asset’s price will fall. If the underlying asset price falls below the put option’s strike price, this strategy profits.

The Short Put

It is an options strategy where the trader sells a put option with the expectation that the underlying asset’s price will rise. If the underlying asset price rises above the put option’s strike price, this strategy profits.

The Bull Spread

A bull spread is an options strategy where the trader buys a call option and sells a higher strike call option with the same expiration date. This strategy is used to profit from a rise in the underlying asset price while limiting downside risk.

The Bear Spread

A bear spread is an options strategy where the trader buys a put option and sells a higher strike put option with the same expiration date. This strategy is used to profit from a fall in the underlying asset price while limiting downside risk.

The Straddle

It is an options strategy where the trader buys a call option and a put option with the same expiration date and strike price. This strategy is used to profit from volatility in the underlying asset price.

The Strangle

A strangle is an options strategy by which the trader buys a call option and a put option with different expiration dates but the same strike price. This strategy is used to profit from volatility in the underlying asset price.

The Ratio Spread

A ratio spread is an options strategy where the trader buys a call option and sells twice as many put options with the same expiration date and strike price. This strategy is used to profit from a rise in the underlying asset price while limiting downside risk.

The Condor

A condor is an options strategy where the trader buys a call option, sells a call option with a higher strike price, buys a put option, and sells a put option with a lower strike price. This strategy is used to profit from volatility in the underlying asset price—link to this website for more options trading strategies.