Options are excellent tools for both position trading and risk management, but finding the right strategy is key to using these tools to your advantage. This presentation helps you understand what options are and how they work

1. Options Strategies - I

2. Short Call Option Strategy
A short call is simply the sale of one call option. Selling options
is also known as "writing" an option. A short is also known as a
‘Naked Call’. Naked calls are considered highly risky positions
because your risk is unlimited.
A call option means an option to buy. Buying a call option
means that a trader expects the underlying price of a stock to
rise in future. Selling a call option is just the opposite of buying
a call option. In this case, seller of the option feels that the
underlying price of a stock is set to fall in the future.

3. The Payoff chart (Short Call)
When to Use:
When traders are bearish on market direction and also on market volatility.
Short Call Strategy

4. Long Call Option Strategy
A long call option strategy is the most basic option trading
strategy for investors who want a chance to participate in the
underlying stock's expected appreciation during the term of the
option. This strategy comprises buying a call option in
consideration of a premium.
Long call option has a limited lifespan. If the underlying stock
price does not move above the strike price before the expiration
date of the option, the call option will expire worthless.

5. The Payoff chart (Long Call)
When to use:
When a trader is bullish on the stock.
Long Call Strategy

6. Synthetic Long Call
This is the strategy where a trader buys stock from the cash
market and a put option of that stock from the future market. A
put option gives the trader the right to sell the stock at a certain
price, which is the strike price of the put option. The strike price
can be price at which the trader bought the stock or slightly
below.
This strategy helps the trader in providing insurance against the
price fall of the stock that he bought from the cash market. If
the stock price rises, the trader benefits from the price rise and
if it falls, he can exercise the put option.

7. + =
B u y S t o c k Buy Put Syn th et ic Lon g C all
When to use:
When a trader wants to hold a stock for long term but is concerned about
near term downside risk.
The Payoff chart (Synthetic Long Call)
Synthetic Long Call

8. Long Put Option Strategy
Put options are the opposite of calls. Long put is a bearish
strategy. When the trader is bearish, he/she buys put options.
A put option is a contract that gives the owner the right, but
not the obligation, to sell an underlying asset, at a
predetermined price, on or before a pre-specified day.
Long put is one of the widely used strategies when a trader is
bearish. The long put option strategy is where the trader buys
put options expecting that the price of the underlying security
will decline significantly below the striking price before the
expiration date. The long put strategy can work as an alternative
to the trader simply selling short and then buying it back at a
profit if the stock falls in price.

9. When to use:
When a trader is very bearish on the stock.
The Payoff chart (Long Put)
Long Put Strategy

10. To be continued…
Thank You!