Bearish strategies

An investment Plan in one's life is just a game-changing plan. Therefore, for an effective financial future you will need to review and reconsider your portfolio on a typical basis. But often it sometimes appears that in the options game, traders just want to maximise their profits at low risks. So they only jump here without knowing of the available Options Strategies. But with little hard work and research, traders can do wonders and utilise options for their maximum.

Options Strategy involves the simultaneous buying and selling of a number of options with distinct variables. It intends to focus on a certain risk or opportunity combined with the elimination of other possible risks or dangers. It is classified as: Bullish Strategy, Bearish Strategy and Neutral Strategy. straddle option

Bullish Strategy: - Generally the options trader goes with this strategy when he expects the underlying stock price to go to a higher place. It becomes necessary for him with an estimate of the stock price and its timeframe in that the possible rise can happen. When the trader is bullish and is buying a moderate rise in the price of underlying asset, he then opts for Bull Call Spread Strategy. It involves buying the decision options at a certain rate and then selling them a higher rate in the exact same expiration period and underlying asset. Bearish strategies

Bearish Strategy: - This strategy is recognized as once the options trader expects the underlying stock price to fall. An estimate is needed of how low the stock price will be, along using its timeframe of decline. When the trader is bearish and is expecting a drop in the price of underlying asset, he then opts for Bear Put Spread Strategy. In cases like this, the options trader buys the put options at a certain rate and then sells them at a lower rate in the exact same expiration period and underlying assets. These strategies provide limited gains and limited losses.

Neutral strategy: - This strategy can also be referred to as non-directional strategy. Here the options trader does not have any idea about the price of the underlying stock. It could either rise or fall. Moreover, the profit in this case does not rely on the rising price i.e. if the purchase price will rise, the profit will also rise, and instead it depends on the expected volatility of the underlying stock price. Samples of this strategy are Strangle, Straddle, Butterfly, Collar, Risk Reversal, Iron Butterfly, Iron Condor etc.