Part 1 Support and Resistance

Strategies in Option Trading

This is where options become art + science. Traders combine Calls and Puts into strategies.

1. Single-Leg Strategies

Long Call – Bullish.

Long Put – Bearish.

Short Call – Bearish, unlimited risk.

Short Put – Bullish, high risk.

2. Multi-Leg Strategies

Covered Call – Hold stock, sell call. Income + limited upside.

Protective Put – Hold stock, buy put. Insurance strategy.

Straddle – Buy Call + Put (ATM). Bet on high volatility.

Strangle – Buy OTM Call + Put. Cheaper than straddle.

Iron Condor – Sell OTM call & put, buy further OTM options. Profits if market stays range-bound.

Butterfly Spread – Limited risk, limited reward, ideal for low-volatility expectations.

Golden Rules for Option Traders

Always define risk before entering a trade.

Never sell naked options without deep experience.

Focus on probabilities, not predictions.

Respect volatility—it can make or break your trade.

Keep learning—options are a lifelong journey.