Similar to bearish options strategies, there are bullish options strategies that various traders utilize when they expect asset prices to escalate. For choosing the most suitable options strategy, you need to ascertain the extent to which the underlying price might increase and the period during which the rally would take place.
Seven best bullish options strategies
Given below are the seven best bullish options strategies that you can use if you have a bullish outlook on an index or stock:
1) Bull Call Spread Strategy
A bull call spread comprises one short call at an elevated strike price and one long call at an inferior strike price. Both options feature the equivalent date of expiry and the underlying stock.
The bull call spread option is established for a net cost (or net debit) and gains as the underlying stock price increments.
2) Bull Put Spread Strategy
A bull put spread strategy is about short selling or writing a put option when simultaneously buying one more put option with the equivalent expiry date but a lesser strike price (on the identical fundamental asset).
3) Synthetic Call Strategy
Traders and investors that apply the synthetic long call options strategy purchase a stock since they have a positive viewpoint. However, what will happen when the stock price slumps rather? If you are an investor, you would desire certain safeguards from a price slump.
4) Call Ratio Back Spread
One of the best option trading strategies is the call ratio backspread strategy. Bullish investors apply this strategy to restrict losses while anticipating the fundamental stock or security to climb drastically. The strategy is a blend of purchasing a higher volume of call options and selling a lesser volume of calls at a distinct strike with an identical expiry date.
5) Bull Butterfly Spread
This is another bullish options strategy. A long butterfly options trading strategy comprises selling two calls at an elevated strike price, buying one call option at a lesser strike price, and subsequently buying one call still at an increased strike price. There is a similar gap between strike prices, and all calls have identical expiry dates.
6) Bull Call Ladder Spread
This is another options trading strategy tailored to gain from augmented security prices. The bull call ladder spread is identical to the bull call spread because its most sensible application is while you anticipate the price of a security to improve but not radically.
7) Bull Condor Spread
The Bull Condor Spread or Long Iron Condor Options Strategy necessitates purchasing a lesser-middle strike put, selling a lesser strike put, buying an upper-middle strike call, and selling an upper strike call.
There is no guaranteed profit option strategy. If you still have the zeal to enter the uncharted territory of bullish options trading, you can look for option strategies with examples to enhance your knowledge. There are scores of the most successful options strategy pdf documents available on the Internet that would work wonders for you. Reading an option trading strategies book pdf will help you interpret the most intricate strategies without hassle.
You can create an options strategies cheat sheet for quick reference and convenient comprehension of the fundamental techniques. There are resources like the top 10 fixed return option trading strategies that you can surf on the Internet. To pick the most successful options strategy, gather as much information as possible and remain practical in your outlook.