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1
Complex Options. Simple Solutions.
2
Buy Call / Long Call
Sell Put / Short Put
Bull Call Spread
Bull Put Spread
Call Ratio Back Spread & Call Ratio Back Spread Ladder
Covered Call (Buy Stock + Sell Call)
Protective Put (Long Stock + Long Put)
Bullish Market Strategies
3
Buy Call / Long Call
Market Scenario: Bullish
Risk: Limited
Reward: Unlimited
BEP: Call Strike + Premium
Investor uses long Call when he is
bullish about the market. A long
Call is simply the purchase of one
Call Option.
4
Sell Put / Short Put
Market Scenario: Bullish
Risk: Unlimited
Reward: Limited to premium
BEP: Strike - Premium
Investor uses Short Put when he
is bullish on the market direction
and bearish on market volatility.
A Short Put is simply the selling
of one Put Option.
5
Bull Call Spread
Market Scenario: Bullish
Risk: Limited || Reward: Limited
BEP: Strike Price of Purchased Call + Net Debit Paid
Bull: This Strategy will earn profit when
market is Bullish and will lose money
when market is Bearish.
Call: We will use Call Options to make
this Spread.
Spread: Spread means combination of
Bought and Sold Options.
6
Bull Put Spread
Market Scenario: Bullish
Risk: Limited || Reward: Limited
BEP: Higher Strike - Net Premium Received
Bull: This Strategy will earn profit when
market is Bullish and will lose money
when market is Bearish.
Put: We will use Put Options to make this
Spread.
Spread: Spread means combination of
Bought and Sold Options.
7
Call Ratio Back Spread
 Market Scenario: Bullish || Risk: Limited || Reward: Unlimited
 Lower BEP: Lower Strike + Net Premium Received
(in case trader has received net Premium otherwise there will not be any lower BEP)
 Upper BEP: Upper Strike + (Upper Strike - Lower Strike) - Net Premium Received
(in case trader has received net Premium otherwise we will add the Net Premium paid amount)
Call: We will use Call Options to make this
Spread.
Ratio: The proportion of quantity bought and
Quantity sold is there in some Ratio.
Back Spread: When we buy more quantity of one
Strike compare to Quantity sold of other Strike, it
is called Back Spread.
8
Call Ratio Back Spread Ladder
 Market Scenario: Highly Bullish || Risk: limited || Reward: Unlimited
 Cost of Spread: Total premium received || Spread Range: Sell Strike - Lower Buy Strike
 Lower BEP: Call sell Strike + Cost of Spread || Upper BEP: Call higher buy Strike + Maximum loss
 Maximum Profit: Unlimited || Maximum Loss: Spread range - Cost of Spread
Call: We will use Call Options to make this Spread.
Ratio: The proportion of quantity bought and Quantity
sold is there in some Ratio.
Back: We will buy more Options and sell less Options
Spread: Combination of Buy and Sell Options
Ladder: the quantity of trade which will be more (e.g.
we buy more in Back spread) will use 2 different strikes
instead of the same.
9
Covered Call (Buy Stock + Sell Call)
Market Scenario: Neutral to Bullish
Reward: Strike + Premium
BEP: Stock Price Paid - Premium
Risk: if stock is moving down you will lose your stock value but you will gain the premium as buyer is not going
to buy. If stock is moving up beyond the Strike, you have to give up all the gain.
The covered Call is a strategy in which an
investor sells a Call Option on a stock he
owns. The Call Option sold is usually an OTM
Call.
10
Protective Put (Long Stock + Long Put)
Market Scenario: Bullish
Reward: Unlimited
BEP: Put Premium + Stock Price
Risk: Losses limited to Stock price + Put Premium – Put Strike price
In Protective Put, we purchase a stock since we
feel bullish about it, but what if the price of the
stock goes down. You wish you had some
insurance against the price fall. So buy a Put on
the stock.
11
www.facebook.com/finideas
www.twitter.com/finideas
www.youtube.com/finideas
http://finideasmspl.blogspot.in/
-: Contact :-
FinIdeas Management Solutions Pvt. Ltd.
803, City Centre, Nr. Sosyo Circle, Udhana Magdalla Road, Surat – 395 004
1002, Luxuria Business Hub, Gaurav Path Road, Surat – 395 007
www.finideas.com || info@finideas.com
Thank You

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Options strategies for Bullish Market

  • 2. 2 Buy Call / Long Call Sell Put / Short Put Bull Call Spread Bull Put Spread Call Ratio Back Spread & Call Ratio Back Spread Ladder Covered Call (Buy Stock + Sell Call) Protective Put (Long Stock + Long Put) Bullish Market Strategies
  • 3. 3 Buy Call / Long Call Market Scenario: Bullish Risk: Limited Reward: Unlimited BEP: Call Strike + Premium Investor uses long Call when he is bullish about the market. A long Call is simply the purchase of one Call Option.
  • 4. 4 Sell Put / Short Put Market Scenario: Bullish Risk: Unlimited Reward: Limited to premium BEP: Strike - Premium Investor uses Short Put when he is bullish on the market direction and bearish on market volatility. A Short Put is simply the selling of one Put Option.
  • 5. 5 Bull Call Spread Market Scenario: Bullish Risk: Limited || Reward: Limited BEP: Strike Price of Purchased Call + Net Debit Paid Bull: This Strategy will earn profit when market is Bullish and will lose money when market is Bearish. Call: We will use Call Options to make this Spread. Spread: Spread means combination of Bought and Sold Options.
  • 6. 6 Bull Put Spread Market Scenario: Bullish Risk: Limited || Reward: Limited BEP: Higher Strike - Net Premium Received Bull: This Strategy will earn profit when market is Bullish and will lose money when market is Bearish. Put: We will use Put Options to make this Spread. Spread: Spread means combination of Bought and Sold Options.
  • 7. 7 Call Ratio Back Spread  Market Scenario: Bullish || Risk: Limited || Reward: Unlimited  Lower BEP: Lower Strike + Net Premium Received (in case trader has received net Premium otherwise there will not be any lower BEP)  Upper BEP: Upper Strike + (Upper Strike - Lower Strike) - Net Premium Received (in case trader has received net Premium otherwise we will add the Net Premium paid amount) Call: We will use Call Options to make this Spread. Ratio: The proportion of quantity bought and Quantity sold is there in some Ratio. Back Spread: When we buy more quantity of one Strike compare to Quantity sold of other Strike, it is called Back Spread.
  • 8. 8 Call Ratio Back Spread Ladder  Market Scenario: Highly Bullish || Risk: limited || Reward: Unlimited  Cost of Spread: Total premium received || Spread Range: Sell Strike - Lower Buy Strike  Lower BEP: Call sell Strike + Cost of Spread || Upper BEP: Call higher buy Strike + Maximum loss  Maximum Profit: Unlimited || Maximum Loss: Spread range - Cost of Spread Call: We will use Call Options to make this Spread. Ratio: The proportion of quantity bought and Quantity sold is there in some Ratio. Back: We will buy more Options and sell less Options Spread: Combination of Buy and Sell Options Ladder: the quantity of trade which will be more (e.g. we buy more in Back spread) will use 2 different strikes instead of the same.
  • 9. 9 Covered Call (Buy Stock + Sell Call) Market Scenario: Neutral to Bullish Reward: Strike + Premium BEP: Stock Price Paid - Premium Risk: if stock is moving down you will lose your stock value but you will gain the premium as buyer is not going to buy. If stock is moving up beyond the Strike, you have to give up all the gain. The covered Call is a strategy in which an investor sells a Call Option on a stock he owns. The Call Option sold is usually an OTM Call.
  • 10. 10 Protective Put (Long Stock + Long Put) Market Scenario: Bullish Reward: Unlimited BEP: Put Premium + Stock Price Risk: Losses limited to Stock price + Put Premium – Put Strike price In Protective Put, we purchase a stock since we feel bullish about it, but what if the price of the stock goes down. You wish you had some insurance against the price fall. So buy a Put on the stock.
  • 11. 11 www.facebook.com/finideas www.twitter.com/finideas www.youtube.com/finideas http://finideasmspl.blogspot.in/ -: Contact :- FinIdeas Management Solutions Pvt. Ltd. 803, City Centre, Nr. Sosyo Circle, Udhana Magdalla Road, Surat – 395 004 1002, Luxuria Business Hub, Gaurav Path Road, Surat – 395 007 www.finideas.com || info@finideas.com Thank You