This chapter provides detailed descriptions for option trading strategies, including a streamlined and uniform formulaic description of the payoff, maximum profit and loss, and break-even price points. The chapter covers essentially all standard and some more exotic option trading strategies such as covered call/put, protective call/put, vertical spreads such as bull/bear call/put spreads and bull/bear call/put ladders, synthetic forwards, combos also known as risk reversal, calendar and diagonal spreads, straddles, strangles, guts, synthetic straddles, covered short straddles and strangles, strap, strip, call/put ratio backspreads, ratio call/put spreads, butterflies, modified butterflies, iron butterflies, condors, iron condors, box, collar, and seagull spreads. The chapter also provides a general descriptive overview of options and option trading strategies, and a substantial number of academic journal article and option trader oriented book references.


Covered call Protective put Vertical spread Ladder Synthetic forward Risk reversal Calendar spread Diagonal spread Straddle Strangle Guts Synthetic straddle Covered straddle Covered strangle Strap Strip Backspread Ratio spread Butterfly Iron butterfly Condor Iron condor Box Collar Seagull spread 


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Authors and Affiliations

  1. 1.Quantigic Solutions LLCStamfordUSA
  2. 2.Universidad del CEMABuenos AiresArgentina

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