Strategies

The below list presents strategies based on options and futures contracts

  1. LONG FUTURES
    Buy futures i.e. long position in futures contract

  2. SHORT FUTURES
    Sell futures i.e. short position in futures contract

  3. SYNTHETIC LONG CALL = LONG FUTURES + LONG PUT
    Buy futures and buy put option with strike equal futures price and equal maturity

  4. SYNTHETIC SHORT CALL = SHORT FUTURES + SHORT PUT
    Sell futures and sell put option with strike equal futures price and equal maturity

  5. SYNTHETIC LONG PUT = SHORT FUTURES + LONG CALL
    Sell futures and buy call option with strike equal futures price and equal maturity

  6. SYNTHETIC SHORT PUT = LONG FUTURES + SHORT CALL
    Buy futures and sell call option with strike equal futures price and equal maturity

  7. SYNTHETIC LONG FUTURES = LONG CALL + SHORT PUT
    Buy call option and sell put option with equal strikes and equal maturity

  8. SYNTHETIC SHORT FUTURES = SHORT CALL + LONG PUT
    Sell call option and buy put option with equal strikes and equal maturity

  9. LONG STRADDLE = LONG CALL + LONG PUT
    Buy call option and buy put option with equal strikes and equal maturity

  10. SHORT STRADDLE = SHORT CALL + SHORT PUT
    Sell call option and sell put option with equal strikes and equal maturity

  11. LONG STRANGLE = LONG CALL +LONG PUT
    Buy call option and buy put option with different strikes: call strike may be higher than put strike or put strike may be higher than call strike. Maturities are equal.

  12. SHORT STRANGLE = SHORT CALL + SHORT PUT
    Sell call option and sell put option with different strikes: call strike may be higher than put strike or put strike may be higher than call strike. Maturities are equal.

  13. BULL CALL SPREAD = LONG CALL + SHORT CALL
    Buy call option with lower strike and sell call option with higher strike. Maturities are equal.

  14. BULL PUT SPREAD = LONG PUT + SHORT PUT
    Buy put option with lower strike and sell put option with higher strike. Maturities are equal.

  15. BEAR CALL SPREAD = SHORT CALL + LONG CALL
    Sell call option with lower strike and buy call option with higher strike. Maturities are equal.

  16. BEAR PUT SPREAD = SHORT PUT + LONG PUT
    Sell put option with lower strike and buy put option with higher strike. Maturities are equal.

  17. ROTATED BULL SPREAD = SHORT PUT + LONG CALL
    Sell put option with lower strike and buy call option with higher strike. Maturities are equal.

  18. ROTATED BEAR SPREAD = LONG PUT + SHORT CALL
    Buy put option with lower strike and sell call option with higher strike. Maturities are equal.

  19. LONG BUTTERFLY = [LONG CALL + 2 SHORT CALL + LONG CALL] or [LONG PUT + 2 SHORT PUT + LONG PUT]
    Buy call option with lower strike, sell 2 call options with average strike and buy call option with higher strike. Maturities are equal.
    Or alternatively:
    Buy put option with lower strike, sell 2 put options with average strike and buy put option with higher strike. Maturities are equal.

  20. SHORT BUTTERFLY = [SHORT CALL + 2 LONG CALL + SHORT CALL] or [SHORT PUT + 2 LONG PUT + SHORT PUT]
    Sell call option with lower strike, buy 2 call options with average strike and sell call option with higher strike. Maturities are equal.
    Or alternatively:
    Sell put option with lower strike, buy 2 put options with average strike and sell option with higher strike. Maturities are equal.

  21. LONG CONDOR = [LONG CALL + SHORT CALL + SHORT CALL + LONG CALL] or [LONG PUT + SHORT PUT + SHORT PUT + LONG PUT]
    Buy call option with lower strike, sell call option with higher strike sell call option with higher strike than previous one and buy call option with highest strike
    Or alternatively:
    Buy put option with lower strike, sell put option with higher strike sell put option with higher strike than previous one and buy call option with highest strike Maturities are equal.

  22. SHORT CONDOR = [SHORT CALL + LONG CALL + LONG CALL + SHORT CALL] or [SHORT PUT + LONG PUT + LONG PUT + SHORT PUT]
    Sell call option with lower strike, buy call option with higher strike, buy call option with higher strike than previous one and sell call option with highest strike. Maturities are equal.
    Or alternatively:
    Sell put option with lower strike, buy put option with higher strike, buy put option with higher strike than previous one and sell put option with highest strike. Maturities are equal.

  23. LONG STRIP = LONG CALL + 2 LONG PUT
    Buy call option and 2 put options. Strikes may be equal or different. Maturities are equal.

  24. SHORT STRIP = SHORT CALL + 2 SHORT PUT
    Sell call option and 2 put options. Strikes may be equal or different. Maturities are equal.

  25. LONG STRAP = 2 LONG CALL + LONG PUT
    Buy 2 call options and put option. Strikes may be equal or different. Maturities are equal.

  26. SHORT STRAP = 2 SHORT CALL + SHORT PUT
    Sell 2 call options and put option. Strikes may be equal or different. Maturities are equal.

  27. CALL RATIO SPREAD = LONG CALL + 2 SHORT CALL
    Buy call option with lower strike and sell 2 call options with higher strike. Maturities are equal.

  28. PUT RATIO SPREAD = 2 SHORT PUT + LONG PUT
    Sell 2 put options with lower strike and buy put option with higher strike. Maturities are equal.

  29. CALL RATIO BACKSPREAD = SHORT CALL + 2 LONG CALL
    Sell call option with lower strike and buy 2 call option with higher strike. Maturities are equal.

  30. PUT RATIO BACKSPREAD = 2 LONG PUT + SHORT PUT
    Buy 2 put options with lower strike and sell put option with higher strike. Maturities are equal.

  31. CONVERSION = LONG FUTURES + LONG PUT + SHORT CALL
    Buy futures contract with lower futures price than strikes of options, buy put option, sell call option. Strikes of options are equal. Maturities are equal.

  32. REVERSAL = LONG CALL + SHORT PUT + SHORT FUTURES
    Buy call option and sell put option. Both options have equal strike. Sell futures contract with futures price higher than options’ strikes. Maturities are equal.

  33. LONG BOX = LONG CALL + SHORT PUT + SHORT CALL + LONG PUT
    Buy call option, sell put option, both with the same strike. Sell call option and buy put option with the same strike. The strike of second pair of options is higher than strike of previous pair of options. Maturities are equal.

  34. SHORT BOX = SHORT CALL + LONG PUT + LONG CALL + SHORT PUT
    Sell call option buy put options with the same strike. Buy call option and sell put option with the same strike. The strike of second pair of options is higher than strike of first pair of options. Maturities are equal.

  35. NEUTRAL CALENDAR SPREAD = SHORT CALL + LONG CALL
    Sell call option and buy call option. The strikes are equal. Maturity of long call option is longer than maturity of short call option. Strikes should be close to spot price.

  36. BULLISH CALENDAR SPREAD = SHORT CALL + LONG CALL
    Sell call option and buy call option. The strikes are equal. Maturity of long call option is longer than maturity of short call option. Strikes should be higher than spot price.

  37. BEARISH CALENDAR SPREAD = SHORT CALL + LONG CALL
    Sell call option and buy call option. The strikes are equal. Maturity of long call option is longer than maturity of short call option. Strikes should be lower than spot price.

  38. DIAGONAL SPREAD
    Use call and put option with different strikes and different maturities.