1. long call

call is the most popular trading strategy since the introduction of listed options. Ordinary investors should thoroughly understand some basic knowledge about buying and holding call options before learning more complex bullish and bearish strategies.

① Market judgment: bullish or strongly bullish

② Purpose and benefits

The attraction of this strategy for investors lies in its small amount of capital invested and the financial leverage provided by long call options. The main motivation of investors is to get the return brought by the rising price of the underlying securities. To get the best return, you must also choose the right option. Generally speaking, the higher the "out-of-the-money" of a call option, the higher the bullish degree of the strategy, because the underlying stock needs a larger increase to make the option reach the breakeven point.

2. long put

long put is an ideal tool for investors to profit from the decline of the underlying stock price. Investors should thoroughly understand the basic knowledge of buying and holding put options before understanding more complex put strategies.

① Market judgment: bearish

② Purpose and benefits

Buying a put option without holding the underlying stock is a purely directional bearish speculation strategy. The main purpose of investors buying put options is to profit from the decline in the price of the underlying stock. Buying put options can be used as an alternative to short selling stocks, but the potential risk is small and it can provide investors with greater leverage. Generally speaking, the higher the "out-of-price" degree of the option, the stronger the bearish nature of the strategy, because the underlying stock price needs to fall more sharply to make the option reach the breakeven point.

3. married put

investors can establish a "married put" position by buying a put option and the same number of shares in the underlying stock at the same time. This is a hedging strategy.

investors adopt the paired put option strategy to gain the benefits of holding stocks for a long time, but they are worried about the unknown short-term downside risks. It is a directional bullish strategy to buy put options and underlying stocks at the same time. The main motivation of investors is to protect the underlying securities they hold from falling prices. Pairing put options is equivalent to buying insurance for stock positions, and its own cost is predetermined and limited (option fee).

4. buy a protective put option

investors buy a put option and hold the underlying stock they bought before. this strategy is called a protective put option.

① Market judgment: bullish on the underlying stock

② Purpose and benefits

Investors who adopt the protective put option strategy hold the previously bought underlying stock, and usually the stock has already won. He may be worried about the unknown downside risk in the near future and hope to protect the floating win he has won. It is a directional bullish strategy to buy a put option and hold the underlying stock at the same time.

5. covered call

the strategy of selling covered call refers to that an investor sells (opens) a call option contract and holds the same amount of shares in the underlying stock. If investors buy the underlying stock at the same time as selling the call option, this strategy is usually called "buy-write". In either case, stocks and options (short positions) are often held in the same brokerage account, which constitutes a complete mortgage or covered for the obligations arising from selling call options. This is a very basic and widely used strategy, which makes full use of the flexibility of options.

① Market judgment: neutral or bullish on the underlying stock

② Purpose and benefits

Selling call options can be used in any market situation, but the most commonly used situation is that investors are still optimistic about the underlying stock, but feel that the market may enter a small shock before the option expires. Therefore, investors hope to generate additional income, or provide limited protection against the decline in the value of the underlying stock (limited to the cost of selling call options).

6. Cash-Secured Put)

According to the terms of the put option contract, when the option is exercised, the seller of the option is obliged to buy the corresponding underlying shares at the exercise price set by the put option. Many investors sell put options because they want the option to be executed and buy the underlying stock, and at the same time get the option fee for selling put options. As far as the cash-guaranteed put option strategy is concerned, the seller of put option often has enough cash (or other recognized collateral) in the brokerage account to complete the stock purchase.

① Market judgment: neutral or slightly bullish

② Purpose and benefits

There are two main intentions to adopt this strategy, either to buy the underlying stock at a price lower than the current market price, or to hope that the option will become "out-of-price" when it expires and its value will be zero, so as to keep the option fee obtained by selling the option. Only when investors are willing to hold the underlying stock can they consider selling cash-backed put options, because the options may be executed at any time before their expiration. In addition, if the option is exercised, he should be satisfied with the net cost of the stock. The number of put options sold should be consistent with the share of shares that investors are willing and able to buy.

7. Bull call spread

Bull call spread is a call option to buy a certain underlying stock and sell a call option with the same underlying stock, the same maturity month and a higher exercise price. This price difference is sometimes broadly classified as vertical price difference. Vertical spread refers to the option spread of the same underlying stock with the same maturity but different execution prices, which can be composed of call and put options, and can be based on both call and put strategies. Like any other spread, the bull call option spread can be executed as a unit in a transaction without having to buy options and sell options separately. We can see the quotation of the whole spread portfolio through the brokerage market software.

① Market judgment: moderately bullish to bullish

② Purpose and benefits

Investors usually adopt the bull call option spread strategy in a moderately bullish market withdrawal, hoping to profit from a small increase in the underlying stock price. If investors are strongly bullish on stocks, then buying a simple call option directly can usually make more profits.

8. Bear put spread

The bear put spread strategy is to buy a put option of a certain underlying stock and sell a put option with the same underlying stock, the same maturity month and a lower exercise price.

① Market judgment: moderately bearish

② Purpose and benefits

Investors usually adopt the bear market put option spread strategy in a moderately bearish market withdrawal, hoping to profit from a small decline in the underlying stock price. If investors are strongly bearish on stocks, then buying a simple put option directly can usually make more profits.