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 2 calls at higher strikeMarket Outlook: BullishRisk: LimitedReward: UnlimitedIncrease in Volatility: Typically helps positionTime Erosion:…
Example: Buy 1 call with higher strike; buy 1 put with lower strikeMarket Outlook: Large move in either directionRisk: LimitedReward:…
Example: Buy 1 call; buy 1 put at same strikeMarket Outlook: Large move in either directionRisk: LimitedReward: UnlimitedIncrease in Volatility:…