Can we summarise the earlier discussions on Option Trading Strategies?
In our previous discussions, we covered Bullish and Bearish Strategies. We also discussed Covered Calls in detail. We now turn to Option Strategies which you can apply if you are Neutral or if you believe the market will turn Volatile. What does Neutral mean? Neutral means you believe that the index or scrip in question is likely to remain wherever it is, or that the movement is not likely to be significant. For example, if the Sensex is around 3,200 now and you believe that the Sensex will stay around this level in the next two weeks, you are said to be Neutral. What does Volatile mean? A volatile view will imply that you believe the market will definitely move either upwards or downwards, but you are not sure which way the movement will occur. You are however quite sure that the market will not stay where it is. In this sense, a Volatile view is quite the opposite of the Neutral view. What strategies can be applied to these situations? The most common strategies to both situations ar
