First step to learning option adjustments:
Option strategy names are so confusing right? [iron fly/ iron condor/ bull call spread etc]
Do you agree? many strategies are combination of other strategies or can say extension of other strategies?
wait,
will give example: (1/3)
Option strategy names are so confusing right? [iron fly/ iron condor/ bull call spread etc]
Do you agree? many strategies are combination of other strategies or can say extension of other strategies?
wait,
will give example: (1/3)
1) If you buy a Call of 200 strike - its Call Long
2) If you add second leg sell 220CE [to reduce cost ] - it became Bull call spread
3) if you add third leg :
sell same strike 220Ce - it becomes Call Ratio
Or if you sell strike 240CE - it becomes Call Ladder
(2/3)
2) If you add second leg sell 220CE [to reduce cost ] - it became Bull call spread
3) if you add third leg :
sell same strike 220Ce - it becomes Call Ratio
Or if you sell strike 240CE - it becomes Call Ladder
(2/3)
4) Now in call ratio if you add 4th Leg:
Buy 240 CE - It becomes Butterfly
So instead of looking at name try understanding the purpose of each leg
like Shakespeare said "whats in the name"
[its different issue that his name is quoted below his statement 😆]
(3/3)
Buy 240 CE - It becomes Butterfly
So instead of looking at name try understanding the purpose of each leg
like Shakespeare said "whats in the name"
[its different issue that his name is quoted below his statement 😆]
(3/3)
