Example: Buy putMarket Outlook: BearishRisk: LimitedReward: Limited, but substantialIncrease in Volatility: Helps positionTime Erosion: Hurts positionBreak Even: Strike price minus…
Example: Sell 1 put; buy 1 put at higher strikeMarket Outlook: BearishRisk: LimitedReward: LimitedIncrease in Volatility: Helps or hurts depending…
Example: Sell 1 put; buy 2 puts at lower strikeMarket Outlook: BearishRisk: LimitedReward: Limited, but substantialIncrease in Volatility: Typically helps…
Example: Sell 1 call; buy 1 call at higher strikeMarket Outlook: Neutral to bearishRisk: LimitedReward: LimitedIncrease in Volatility: Typically hurts…