
fx Methods
THE FOREX CONSULTANTS


OPTION NEUTRAL STRATEGY
Below, we have listed a range of neutral options trading strategies that are commonly used by options traders. We’ve included a little information about each one, but for further details you should click on the relevant link. If you are struggling to choose a suitable strategy, you may like to take a look at our Selection Tool.
Covered Call
This is relatively simple and would typically be used if you already own a security and want to profit from it being in a neutral trend. It's suitable for beginners.
Covered Call Collar
This is fairly simple and you would generally use it if you already own a security and want to profit from it being in a neutral trend and protect it against any losses should it fall in price. It is suitable for beginners.
Covered Put
This is reasonably complex and combines short selling a security and writing put options. It's not suitable for beginners.
Short Straddle
This is a relatively simple trading strategy, but it's not really suitable for beginners due to the high trading level required. It involves two transactions and creates a credit spread.
Short Strangle
This is quite straightforward but requires a high trading level so it's not suitable for beginners. It creates a credit spread and involves two transactions.
Short Gut
This combines two transactions to create a credit spread. It's quite simple, but it requires a high trading level meaning it isn't suitable for a beginner.
Calendar Call Spread
This is simple enough to be used by beginners. Two transactions are involved and a debit spread is created.
Calendar Put Spread
This is straightforward and involves two transactions. It creates a debit spread and is suitable for beginners.
Call Ratio Spread
This is a complicated trading strategy that is not suitable for beginners. There are two transactions involved and a credit spread is created.
Put Ratio Spread
This is complex and not for beginners. It creates a credit spread with two transactions.
Calendar Straddle
This involves four separate transactions to create a debit spread. It isn't suitable for beginners.
Calendar Strangle
This creates a debit spread. There are four transactions involved and it isn't suitable for beginners.
Butterfly Spread
This is complex and involves three transactions to create a debit spread. It isn't suitable for beginners.
Condor Spread
This is complex and it creates a debit spread using four separate transactions. It isn't suitable for beginners.
Albatross Spread
This involves four transactions and is complicated. It creates a debit spread and is not suitable for beginners.
Iron Butterfly Spread
This is complex and creates a credit spread. It involves four transactions and it's not suitable for beginners.
Iron Condor Spread
This is complex, involving four transactions, and it's not suitable for beginners. It creates a credit spread.
Iron Albatross Spread
This is complicated and not suitable for beginners. It involves four transactions and creates a credit spread.