Paer 4 Learn Institutional Trading

Options Trading Strategies
Basic Strategies

Long Call → Buy call, bullish.

Long Put → Buy put, bearish.

Covered Call → Own stock + sell call for income.

Protective Put → Own stock + buy put for protection.

Intermediate Strategies

Straddle: Buy Call + Put at same strike (bet on volatility).

Strangle: Buy Call (higher strike) + Put (lower strike).

Bull Call Spread: Buy low strike call + sell higher strike call.

Bear Put Spread: Buy put + sell lower strike put.

Advanced Strategies

Iron Condor: Range-bound strategy selling OTM call + put spreads.

Butterfly Spread: Profit from low volatility near strike.

Ratio Spreads: Adjust risk/reward with multiple options.

Margin Requirements & Leverage

Option buyers: Pay only premium (small capital).

Option sellers (writers): Need large margin (higher risk).

NSE SPAN + Exposure margin system determines requirements.

For example, selling 1 lot of Bank Nifty option may require ₹1.5–2 lakh margin depending on volatility.