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Bullish Option Trading Strategies

Author: Alex Smith
by Alex Smith
Posted: Jul 27, 2015

The Bullish trading strategies are used when the options trader is expecting an increase in the price of the underlying stock. It is important to analyse how high the stock price would go and in what timeframe. This will help in deciding on the most appropriate options strategy. Let's find out the level of bullish strategies:

  • Very Bullish: This is the call buying strategy which is used by option trading beginners.
  • Moderately Bullish: In a moderately bullish strategy, the trader sets a target value for the bull run while making use of the bull spreads in order to reduce risk. These strategies cap maximum profit but costs less to employ.
  • Mildly Bullish: These options strategies make money until the price of the underlying stock doesn't decrease on options expiration date. The mildly bullish strategies also provide a downside protection.

Types of Bullish Strategies

  • Bull Calendar Spread
  • Bull Call Spread
  • Bull Put Spread
  • Bull Condor Strategy
  • Bull Call Ladder Strategy
  • Call Backspread
  • Bull Ratio Spread
  • Collar Strategy
  • Short Bull Ratio Spread
  • Bull Butterfly Spread
  • Costless Collar
  • Covered Call (OTM)
  • Covered Call (ITM)
  • Covered Straddle
  • Diagonal Bull Call Spread
  • Long Call
  • Married Put
  • Protective Put
  • Uncovered Put Write
  • Covered Combination
  • Stock Repair Strategy

Out of these many strategies, only a few are commonly used.

Every bullish options trading strategy has its own characteristics, merits and demerits. To choose the best strategy, you must analyse all its aspects. An appropriate strategy would help you in achieving your profits goals. The advantage of bullish strategies is that you can make credit spread. It returns an upfront payment instead of debit spreads that come with an upfront cost. These strategies can control the factors that can affect the price of the underlying assets. These factors are risk of involved in trading or the required capital amount. Bullish strategies put you in that position where you get more and more profit with the price increase of the underlying asset. The disadvantage of these strategies are that you end up paying high commissions as bullish strategies require more number of transactions in order to establish spreads. But the rate of success is too high once you have thoroughly understand these strategies' concepts and know how to use them and when.
About the Author

For more information about www.consistentoptionsincome.com

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Author: Alex Smith

Alex Smith

Member since: May 27, 2015
Published articles: 3

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