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Summary

Naturally everyone wants to make money when the market is heading higher. It's important to remember that trading long stocks is not the only way to make money, in fact it's more capital intensive and less profitable. With these options strategies you have the opportunity to use less money and create a more defined outcome, as opposed to stock investing.

12 lessons

Bull Put Spread

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

Bull Call Spread

A bull call debit spread is a multi-leg, risk-defined, bullish strategy with limited profit potential. A bull call spread is entered when the buyer believes the underlying asset price will rise before the expiration date.

Long Call

A long call is a bullish options strategy where the expectation is a rise in price prior to expiration. Buying a call option is a levered, risk-defined alternative to buying shares of stock.

Short Put

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

Bull Call Backspread

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

Put Broken Wing Butterfly

A put broken-wing butterfly spread is an advanced bullish option strategy with the goal of having no upside risk. Put broken wing butterflies consist of buying one in-the-money long put, selling two out-of-the-money short puts, and buying one out-of-the-money long put below the short puts.

Call Calendar Spread

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

Put Diagonal Spread

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

Custom Naked Put

The custom naked put is a bullish options strategy that combines two strategies, which provides some downside protection if the stock moves lower. Think of the strategy as entering an iron condor without the long put.

Covered Call

A covered call is an options strategy with undefined risk and limited profit potential that combines a long stock position with a short call option. Covered calls are used to generate income if an investor is moderately bullish and plans to hold shares of stock in an asset for an extended length of time.

Synthetic Long Stock

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

Bullish Debit Spread or Credit Spread?

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

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FAQs

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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.

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