Free Bearish Options Strategies Course | Option Alpha

Get Option Alpha 100% FREE by connecting your TradeStation or Tradier Brokerage account! Learn more.

Summary

Declining markets and high IV give traders an amazing opportunity to sell expensive options that can quickly decay in value and produce a profit. This truth is that great traders make the vast majority of their money when markets are falling. In this module, we'll cover our favorite strategies to profit from bearish markets with credit spreads, naked options, etc.

12 lessons

Bear Call Spread

A bear call credit spread is a multi-leg, risk-defined, bearish strategy with limited profit potential. A bear call spread is entered when the seller believes the price of the underlying asset will be below the short call option’s strike price on or before the expiration date.

Bear Put Spread

A bear put debit spread is a multi-leg, risk-defined, bearish strategy with limited profit potential. A bear put spread is entered when the buyer believes the underlying asset price will decline before the expiration date.

Long Put

A long put is a bearish options strategy where the expectation is a decline in price prior to expiration. Buying a put option is a levered, risk-defined alternative to selling shares of stock.

Short Call

A short call is a single-leg, bearish options strategy with undefined risk and limited profit potential. A short call is sold when the seller believes the price of the underlying asset will be below the strike price on or before the expiration date.

Bear Put Backspread

A bear put backspread is a multi-leg, risk-defined, bearish strategy, with unlimited profit potential. A bear put backspread is purchased when an investor believes the underlying asset’s price will be below the long put strike prices at expiration.

Call Broken Wing Butterfly

A call broken-wing butterfly spread is an advanced bearish option strategy with the goal of having no downside risk. Call broken-wing butterflies consist of buying one in-the-money long call, selling two out-of-the-money short calls, and buying one out-of-the-money long call above the short calls.

Put Calendar Spread

A put calendar spread is a multi-leg, risk-defined strategy with unlimited profit potential. Put calendar spreads are neutral to bullish short-term and slightly bearish long-term.

Call Diagonal Spread

A call diagonal spread is a multi-leg, risk-defined, bearish strategy with limited profit potential. A call diagonal spread is entered when an investor believes the stock price will be neutral or bearish short-term.

Custom Naked Call

A custom naked call is a bearish options strategy that combines two strategies, which provides some protection if the stock moves higher. Think of the strategy as entering an iron condor without the long call.

Covered Put

A covered put is an options strategy with undefined risk and limited profit potential that combines selling stock with a short put option. Covered puts are used to generate income if an investor is moderately bearish while short a stock.

Synthetic Short Stock

To create a short synthetic stock position, you simply buy an ATM put option and sell an ATM call option at the same strike price. This creates a bearish position with much less capital than shorting a stock.

Bearish Debit Spread or Credit Spread?

If you are bearish and want to trade an option spread strategy, implied volatility is the main factor when deciding between bearish put debit spreads and bearish call credit spreads.

stars

No items found.

FAQs

Are Option Alpha courses free?

Yes, all our options education is 100% free to access. We believe in giving back and educating traders at all levels and have been blazing this trail by offering free education for more than a decade.

Do you offer an onboarding class?

You can find everything you need to get started with bots and automation in our autotrading resources and Help Center.

‍

Do I need a membership for the education?

No, all our options trading education is 100% free. Sign up for Option Alpha's newsletter to receive updates when we release new podcasts and research blogs.

Who are these courses intended for?

Option Alpha's free education courses and guided tracks are perfect for new traders looking to learn the basic of options trading, as well as experienced traders that want to better understand more advanced options topics.

What course should I start with?

If you're brand new to options trading, you can follow Option Alpha's courses and tracks from Beginner to Intermediate to Advanced for a guided experience. Each course includes multiple videos covering a wide range of subjects that build off the previous lessons.

What topics are covered in Option Alpha's courses?

Our free courses include more than 160 videos on options trading. Learn the basics of options and key terms, options pricing, multiple strategies for beginner and advanced traders, trade adjustments, portfolio management, and more. Option Alpha's education is designed to help you understand every aspect of options trading with in-depth, easy-to-follow guided videos.

How long do I have access to the course materials?

Our guided videos are always available to you. There is no membership required, and they're always free to access.

Be a more powerful options trader

Leverage automation to improve returns, find better trades, and transform into a superhuman trader.

Try It for Free