Understanding options strategies
This growth is largely due to the great flexibility options provide to the investor, a flexibility not available through share investment alone. Some of the key uses for options are leverage, earning extra income, protecting the value of equity positions, limiting risk and as an alternative to direct investment in the share market. So, how can you get the most out of options? The answer is by adopting the appropriate trading strategy which suits your personal circumstances and market view. There are strategies that can be used by investors with bullish, bearish or neutral views of the market, and these strategies can be designed to reflect how bullish or bearish the investor is. Options trade not just in strategies dimension of price, but also in the dimensions of time and volatility. Option strategies can be tailored to suit an investor s view on movements in all of these dimensions. The key word is flexibility. With that in mind, this booklet outlines some of the different strategies available. In a booklet such as this it is not possible to examine every strategy that may be used on the Options Market, rather, this booklet analyses those most commonly used. Each strategy is evaluated by explaining its various components, optimal market conditions for use, and your alternatives when conditions change mid-course. Option transactions should be entered into only by investors who fully understand the nature and extent of their rights and obligations and are aware of the risks involved. This booklet is designed to be read by investors experienced in trading options and who now require more information on how options can be used. It is assumed that readers of this booklet are familiar with option pricing fundamentals, and the concepts of delta and time decay. Investors who have not yet traded in the market or who do not have a thorough understanding of the features of call and put options should not attempt any of the strategies in this booklet. ASX recommends the strategies outlined in this booklet be only entered into by investors under the guidance of a stock broker. For the purpose of simplicity, transaction costs, tax considerations and the cost of funding have been omitted from examples in this booklet. These factors, as well as market liquidity, can affect a strategy s outcome. We recommend you check these particulars with your broker before entering into a transaction. Option premiums used in examples in this booklet are theoretically reasonable, however, may not exist in reality. Investors who propose to deal in options traded on the Options Market operated by ASX must read the explanatory booklet entitled Understanding Options Trading before undertaking any option transactions. These graphs show the profit and loss situations for a particular strategy at a range of share prices at expiry. They do not take into account commissions or other transaction costs. An example will help. The curved line is the time line. The time line gives an approximation of the value of the option at various stages throughout the life of the option. The time line moves closer to the pay-off line as the expiry date approaches. The time line also indicates if a strategy will benefit from time decay or if it will lose from it. If the time line is below the pay-off line then time decay will benefit the strategy. If it is above the pay-off line then time decay will cause the strategy to lose value. Time decay may also have a mixed impact on the value of a particular strategy depending on where the share price is at a particular point in time. Further explanations of pay-off diagrams for sold calls and bought and sold puts are available in the Understanding Options Trading booklet, copies of which are available from ASX or your stock broker. This will be earned if at expiry the share price is at, or above the share price of the call option sold. The potential loss with this strategy is unlimited, since the investor holds the stock. Any fall in the share price will result in unrealised losses. However, since the short call will be worthless at expiry if strategies share price falls below the exercise price of the option, the premium earned on the sale of the option serves to provide some protection from the decline in value of the shares. This is because the investor will only receive the option premium and must forgo the increased value of the shares as they will be obliged to sell their shares at the exercise price of the option they have sold. Other considerations Strike price: Writing in-the-money calls will generate the most income and provide the greatest protection in the event of a market downturn. However the possibility that the option will be exercised is high. Writing at-the-money options will earn the investor the most time value. The choice of strike price will largely depend on whether the investor s view is neutral leaning to bullish, or neutral leaning to bearish. As a result, the investor must be content to lose the stock at that price. The buy and write: It represents a method of purchasing stock at levels below the current market price. Covered writing can also be done with stock bought on margin. Follow-up action If the share price remains flat and volatility remains steady or falls, the position may be left open in order to take advantage of time decay. If the share price unexpectedly strengthens, the trader may consider closing out the position and possibly rolling up to the next strike price. If expiry is approaching and the trader is concerned about unwanted exercise, the position could be closed out and rolled into the next expiry date, thereby avoiding exercise and potentially increasing the income flow. Points to remember Do not use the covered write if you are concerned about being exercised. Be sure that you are happy with the price you will obtain for your shares if you are exercised. Given the possibility the options will be exercised, be sure that the premium received is adequate compensation. You believe that the market is quietening down and the stock will remain at these levels over the next three months. In order to gain some income during this time you decide to write call options over your existing holdings. It is now September. To this we add any credit or subtract any debit from the sale of the call and purchase of the put. If the premium from sale of the call options exceeds the cost of buying the put then the maximum profit is increased by the net credit. The maximum loss occurs if the stock falls to the level of the put. The loss options equal the to the difference between the cost of the stock and the level at which the stock can be sold through exercise of the put, plus the net cost of the options. The potential loss with this strategy is limited because the stock can always be sold for the strike price of the put. X Y Although an unexpectedly strong rise in the share price will not result in a loss, there is an opportunity cost. This is because the investor will be required to sell their shares at the exercise price of the call option. Market outlook moderately bullish Other considerations Strike price: Similarly when choosing which put option to buy, the investor must balance the cost of the put with the level of protection required. The strategy can be viewed as insuring the stock with a put financed either wholly or in part with the proceeds from the written call. Investors should be aware that stock bought on margin through certain margin lenders can be lodged with OCH as collateral for the written calls on a one for one basis. Follow-up action In the event of getting exercised on the short call stock is sold only the put remains which should be sold as it is no longer required. Points to remember Be sure that you are happy with the price you will obtain for your shares if you are exercised. Given the possibility strategies options will be exercised, be sure that the premium received is adequate. Example XYZ shares are trading at In order to insure the stock at 3. To pay for the put option you decide to write an out of the money 4. It does not involve investing more cash or increasing the risk of the position. The strategy combines a losing stock position with a ratio call spread see ratio call spread where twice as many calls are sold as are bought. Unlike the ratio call spread the investor is not exposed to unlimited losses on any of the written calls. The written call options are covered either by the long stock position or by the bought calls. Ideally the spread is opened at no cost, or for a credit, with the premium received from the calls written at the higher strike price paying for the calls bought at the lower strike price. Market outlook X Y mildly bullish Stock Repair Strategy Stock If the stock at expiry is above the strike price of the sold calls the stock is sold at this level. The remaining option position is a bull call spread see bull call spread that achieves its maximum profit at this same price. Follow up If the share price at expiry is below the strike price of the sold options, these options will expire worthless, and the investor has only to close out the bought call to recover any intrinsic value. If the options price is above the strike price of the sold calls, the strategies will need to close out one or both of the written legs. The investor may allow one of the calls to be exercised if they wish to exit their stock position. The bought call will also need to be closed out to recover intrinsic value. It should not be used if a strong upward movement is expected. If the stock continues to fall the strategy does strategies to alleviate further losses on the stock. The maximum profit obtainable is the difference understanding the strike prices of the two options, less the cost of the spread. Maximum profit will occur if, at expiry, the share price is at, or above, the strike price of the sold option. If the stock rises quickly to this level, the spread will often be unwound early in order to avoid the risk of early exercise on the short leg. The higher delta of the long call means that the spread will increase in value as the share price rises. Other considerations When to use the bull spread Market outlook Volatility outlook mildly bullish steady to increasing If the investor is not bullish enough to buy a call outright but expects the share price to rise moderately, the bull spread is a lower cost way to gain exposure to such a market movement. As a result, the profit potential is also reduced. Commission costs on entering and exiting will be greater for this strategy than when buying a call outright. Follow-up action If the stock unexpectedly rises sharply, it may be advisable to exit the strategy once the upper strike price is reached. Although time value is helpful around the strike price of the short leg, unwinding the strategy early removes the risk of exercise on the short call. If the stock price falls suddenly, the spread may be unwound before the taken call loses too much time value. Be sure that the cost of the spread is justified by the potential reward. Do not leg in to this strategy - understanding the trade as a spread and unwind it as a spread. The Bull put spread The bull put spread can be constructed using puts instead of calls. As with the call spread, the investor buys the lower strike option and sells the higher strike option. The investor may decide to construct the spread in this way if the options are perceived to be overpriced. Since entering the put spread involves selling volatility, the higher option premiums will benefit the trader. In contrast, they make the call spread more expensive to enter. The bull put spread can also be viewed as writing a put with protection in place against a collapse in the market. In this case, the written put may be close to being at-the-money, with the taken put out-ofthe-money. The maximum profit from the bull put spread is the premium received when the spread is established. The maximum loss is the difference between the strike prices less the premium received. The disadvantages of the bull put spread are twofold. Since the spread is placed for a net credit, collateral cover will be required. Secondly, the risk of exercise on the short leg is much greater than with the call spread, because the short put has the higher exercise price, and is likely to be around the money at the time the spread is entered. Any fall in the share price could result in early exercise of the short put. However it also caps the profits that can be earned. The maximum profit to be earned is the difference between the strike prices of the two options, less the cost of the spread. If, at expiry, the share price has fallen to the strike price of the sold option, the maximum profit will be earned. If the stock declines to these levels, the trader may well choose to unwind the spread early, in order to avoid the possibility of exercise on the short leg. The maximum potential loss is the cost of the spread. This will occur if, at expiry, the share price is above the exercise price of the bought options. Other considerations When to use the bear spread Market outlook Volatility outlook mildly bearish steady to increasing The bear spread could be considered when the investor expects a moderate fall in the market but is not prepared to pay to take a put outright. As a result, the potential for profit is also reduced. Commission costs on entering and exiting can significantly reduce profitability. Follow-up action If the stock unexpectedly falls sharply, it may be advisable to exit the strategy once the lower strike price is reached. Time decay will benefit the spread around the lower strike price, however the trader will usually be more concerned with avoiding exercise on the short leg. If the stock price rises suddenly, the spread may be unwound before the taken put loses too much time value. Do not leg in to this strategy but rather trade both options at the same time. The bear call spread The bear call spread can be constructed using calls instead of puts. As with the put spread, the trader buys the higher strike option and sells strategies lower strike option. The trader may decide to use calls instead of puts in order to take advantage of options that are understanding as overpriced. Since the trader is selling the spread, the receipt of higher premiums is a benefit. There may also be greater liquidity in calls than puts, giving greater flexibility when entering and exiting the spread. The maximum profit available is the value of the premium received. The bear call spread can be seen as writing a call with protection against an unexpected rise in the market. In this instance, the trader may write a call around the money, and take a call out-of-the-money, which effectively provides a ceiling to the potential loss if the market should rise. The disadvantages of the bear call spread are similar to those of the bull put spread. Since the spread is placed for a credit, there will be margining obligations. Secondly, there is an increased risk of exercise, since the short call has the lower strike price, and is usually strategies at-the-money. Example After a period of rises in the market, you feel that a minor correction is about to take place. You are not willing to pay for an outright put, so you decide to buy a bear put spread: As the market moves strongly in one direction, the gain made on one leg exceeds the loss incurred on the other, and the straddle increases in value. Other considerations Time decay: As a result, time decay works strongly against the bought straddle. The longer the straddle is left in place, the greater the loss due to time decay. The position must therefore be closely monitored and may need to be closed out well before expiry. When to use the long straddle Market outlook Volatility outlook uncertain rising Where the investor expects a sharp movement in the share price, but is unsure of the direction it will take, the long straddle may be appropriate. The more distant expiry months will provide the strategy with more time, however longer dated options will be more expensive than those with shorter dates. Only rarely will this strategy be held to expiry. If the investor s market view proves correct, the straddle should be unwound to crystallise the profits. The position can be liquidated on both sides simultaneously or, if the outof-the-money option has little value, it could be left open in case the market were to reverse. If volatility does not increase as expected, the strategy should be taken off well ahead of expiry, before time decay damages the position. Points to remember Choose options over shares when you expect the shares will remain or become volatile. Select an expiry month that gives the strategy time to work. Monitor the position closely and be prepared to unwind it well before expiry. Example ABC Limited is a gold mining company which has been involved in an extensive exploration program over the last few months. The results of this program are due to be made public in a month. If significant reserves have been discovered, the stock price will show large gains. You believe, however, that if the exploration program proves unsuccessful, ABC s share price will fall sharply. You also believe the price of gold is likely to be volatile over the next six months. You decide to buy a straddle. Synthetic equivalent short call X, short put X market near strike price X strike price plus net premium received strike price less net premium received limited to premium unlimited helps the short straddle yes long underlying asset; short 2 calls When to use the short straddle Market outlook Volatility outlook X aggressively neutral falling For the investor who believes the share price is stagnating, the short straddle may be an appropriate way of earning income. The maximum profit that can be earned from the short straddle is the premium earned from the sale of the options. Maximum profit will result if the share price is at the strike price at expiry. If the share price moves strongly in either direction, the net premium received for selling the straddle provides limited protection, beyond which unlimited losses can occur. The stronger the move, the greater this loss will be. As a result, time decay assists the combination. In order to get the greatest benefit from time decay, it may be best to trade options with near-month expiries, where time decay is starting to accelerate. Therefore, there is always a risk of early exercise on one leg or the other. This can be achieved by taking a put and a call option with out-of-the-money strike prices. Taking protection in this way transforms the short straddle into a synthetic version of the long butterfly see page An increase in volatility will be damaging to the short straddle. The two written options may rise in value, making them more expensive to buy back. The higher volatility also signals that the market may be about to move strongly. The option trader must monitor volatility closely and be prepared to take action should it increase unexpectedly. Follow-up action If the share price remains stable around the strike price, the maximum profit will occur. However, because of the risk of exercise, few short straddles are held until expiry. In the event of an adverse market movement, the investor may decide to close out one or both legs of the straddle. Alternatively, as mentioned above, an out-of-the-money option could be taken as protection. The costs of adjusting the existing straddle position should be weighed against the risks of leaving it in place. Points to remember The short straddle is a high risk strategy and should only be employed if you are very confident that the share price will remain steady. Do not choose expiry months that are too distant. Be prepared to adjust your position if the share price moves strongly in either direction, or volatility increases. Example XYZ is an Australian bank. It has recently released profit figures which were in line with market expectations. Interest rates have been steady for several months and you believe they will remain stable for the next six months. In order to gain some income you decide to write a straddle. Synthetic equivalent long call Y, long put X market between the two strike prices higher strike price plus net premium paid lower strike price less net premium paid unlimited limited to premium paid hurts the long strangle no long call X, long put Y X Y The success of the long strangle depends on a dramatic increase in the volatility of the underlying shares or a sharp move in the share price. As with the long straddle profits can be taken early in the life of the strategy if there has been a big enough move in the share price. Since both options are out-of-the- money, they consist entirely of time value. As expiry approaches, time decay accelerates. For this reason, the strangle is generally understanding well before expiry. When to use the long strangle Market outlook Volatility outlook uncertain rising In a market that has been consistently stagnant and implied volatilities are low, buying a strangle may be appropriate. The taker of this spread is looking for an explosive move in either direction. The strangle is a cheaper strategy than strategies straddle, however a larger move in the share price will be required for it to be profitable. The disadvantage is that the share price must move further for the strategy to be profitable. The investor must be expecting a significant move for the long strangle to be considered. If the expected increase in volatility or change in share price does not eventuate, both options will options worthless. If the expected move in the share price has taken place, the position can usually be unwound at a profit well before expiry. If the stock s direction becomes clear, it may be appropriate to close out the leg that is losing its value and hold the profitable leg. If the expected increase in volatility has not taken place, it may be advisable to close the position out before time decay starts to seriously damage the strategy. Points to remember Choose options over shares whose price you expect to move strongly in either direction. Always be aware of the effects of time decay and do not hold the position too close to expiry. Choose expiry months that allow enough time for the underlying shares to move. Several large export contracts are up for renewal in the next two months. You believe that the share price will move significantly, depending on whether the company retains these contracts. You are not prepared to pay for an expensive straddle, but want to be exposed to either a fall or a rise in AML s price. It is now October and you decide to purchase a strangle. Synthetic equivalent short call Y, short put X market between the two strike prices higher strike price plus net premium received lower strike rate less net premium received limited to premium unlimited helps the short strangle yes short call X, short call Y s and losses The maximum profit that can be earned from the short strangle is the premium received from the sale of the options. This will occur if the share price finishes between the two strike prices at expiry. As the share price moves beyond the strike price of either option, profits decrease. A loss will result if the move is large enough to erode the premium received at the time of writing the options. Should the share price become unexpectedly volatile, the strangle writer faces potentially unlimited losses. X When to use the short strangle Market outlook Volatility outlook neutral strategies When option premiums are overpriced, and the trader believes the underlying shares will stay within a fairly narrow price range, the short strangle may be considered. This strategy has a lower potential profit than the short straddle, however it offers greater protection since the share price must move further to result in a loss. Y Other considerations Volatility: However, the strategy provides better protection against an unexpected increase in volatility in the underlying shares than the straddle as the share price has to move much further before the strategy incurs a loss for the writer. It is often best options construct this combination using options with near month expiries so as to gain the most from time decay. However, a dramatic change in the share price can bring one of the options into-the-money thereby introducing the risk of exercise. Taking a call and a put, both of which are further out-ofthe-money than the written options, places a ceiling on losses. While the cost of taking these options reduces potential profit it may be worthwhile for the conservative investor. By taking protection, the short strangle is transformed into another strategy known as a long condor. Follow-up action If the share price stays within a narrow band as expected, the position may be maintained until near expiry in order to gain the maximum benefits from time decay. If the share price makes an unexpected move, the trader should consider closing out the option which is in danger of being exercised. Another alternative is to vary the break-even points of the strategy by rolling one of the legs up or down, thereby maintaining the strangle. The trader should always be aware that although the short strangle is a more defensive strategy than the short straddle, a sudden and extreme change in volatility can be very damaging. Points to remember Because of the potential for unlimited losses, be sure that the premium received is worthy of the risk taken. Use the short strangle over the short straddle if you have any doubts about the market s neutrality. Example It is now July, and following a period of relatively high volatility in the price of RST Limited, option prices are high. However, you are unwilling to take the risk of writing a straddle over the stock in case the share price fluctuates more than expected. You decide to write a strangle. Synthetic equivalent X long call X, short calls Y market around X lower strike plus cost of the spread upper strike plus maximum profit of spread difference between strike prices less cost of spread unlimited if shares rise cost of spread if shares fall market around lower strike: The potential for profit is partly dependent on how many calls have been sold against each call taken. Generally the ratios are opened on a 1: If the shares fall, the trader can lose no more than the cost of the spread. This protection against a fall in the price of the shares is greater than in the case of a bull call spread due to the higher number of written positions in place. However, if a strong upward movement occurs unexpectedly the trader faces potentially unlimited losses. The higher the number of unprotected calls that have been written, the larger the loss that could be incurred. Ideally the spread is opened for a profit, which involves no risk if the shares fall. When to use the ratio call spread Market outlook Volatility outlook neutral to slightly bullish steady to falling The ratio call spread may be an appropriate strategy for the investor who expects a slight rise in the market, but sees the potential for a sell-off. Other considerations Market strengthens: The price of this protection is the possibility of a loss should the market move further upwards than expected. The trader must meet the collateral requirements of the uncovered calls. If this occurs, the trader may consider closing out the spread, or alternatively closing out the sold options to reduce the risk of exercise. If the share price falls dramatically, the trader may buy back the long call before it loses too much time value. The danger in closing out the long position is that a market reversal leaves the trader totally exposed on the short legs. Points to remember This strategy benefits from a small upward movement in the market. Be wary of constructing the strategy on a ratio higher than 1: Be prepared to act quickly if the share price jumps unexpectedly. Example After a rise in the market over the last six months, you believe there is still some possibility for the shares to rise further. However, given the recent highs reached overseas, you fear the possibility of a downward correction. You decide to place a ratio call spread in RST Limited shares. The value of the long option at this point can only be estimated using pricing models. However, the maximum profit will be realised if the share price is at the strike price of the options at the first expiry. The sold call will then expire worthless, while the long call will have the most possible time value remaining. Time decay of the near month option s premium will be faster than that of the far month option. This has the effect of widening the spread between the two prices. When to use the calendar spread The maximum loss options is the cost of the spread. This will occur if the long call has very little time value left at expiry, in other words if the share price has either risen or fallen dramatically. Market outlook neutral to first expiry Volatility outlook neutral to first expiry Other considerations In a neutral market, the calendar spread provides a method for the trader to earn income by profiting from time decay. This is achieved without the risk of an uncovered sold position. In this case, the trader faces the possibility of early exercise on the short leg. The long leg acts as a hedge, but the cost and inconvenience of being exercised must be considered. If an investor expects the share price to rise, but does not foresee this taking place within the next month, buying a calendar spread effectively gives the investor a call option once the near month expiry has passed, however at a lower cost than taking a call outright. Follow-up action If the market remains steady, the investor may choose to do nothing and let time decay take its course, resulting in the short call expiring worthless. Options investor can then close out the long call or perhaps hold on to it if expectations are now bullish. Holding the call converts the strategy to a simple taken option position, with the attendant risks and rewards. If the stock falls unexpectedly, the investor may choose to close the spread before the long call loses all time value. Otherwise, the position could be left in the hope that the market recovers and the long call improves in value. In the event of a market rise, the investor must decide whether to close out the spread to avoid exercise or maintain it in the hope that the market retreats and time decay can take effect. Points to remember Take advantage of time decay by entering the spread around six weeks before expiry of the near-term option. Be wary of leaving the taken call open after expiry of the sold option. If this is the case then the position becomes a different strategy. Example You believe that shares in ABC Limited are likely to remain stable for at least two months, and wish to earn some extra income during this period. However, you are not prepared to expose yourself to the risks involved in writing an uncovered option. Understanding decide to enter a calendar spread. Synthetic equivalent market around central strike price lower strike plus cost of spread upper strike less cost of spread central strike less lower strike less cost of spread cost of spread market around upper or lower strike: In this case, only the lower strike price call will finish in the money. Accordingly, the trader will profit on the difference between the middle and lower strike price, less the cost of the spread. Most of this profit will develop in the last month as time decay accelerates. The most the trader can lose is the cost of the spread, which will occur if the market finishes out past either wing of the long butterfly. The away-from-the-money options that are required on both sides are often thinly traded, making the strategy difficult and sometimes costly to set up and trade out of. In these circumstances, the reward may not justify the effort of entering the position. Follow-up action If the share price remains steady, the position may be left until close to expiry since the profit develops almost entirely in the last month. If the share price moves sharply up, the options may consider liquidating the position in order to avoid exercise. If the share price moves sharply down, the trader may close out in order to salvage some time value from the taken legs of the strategy. Do not use this strategy on thinly traded stocks. Enter the position with at least a month until expiry. Example It is now December. You believe that shares in XYZ Limited are likely to remain steady for a couple of months and wish to derive some income during this period. You consider selling a straddle but are concerned that an unexpected break either way in the market could be very damaging. You decide to use the long butterfly in order to limit the loss you would face in the event of such a strategies. As outlined above, the long butterfly can be constructed using only calls. However, there are several alternate ways to set up this strategy. Long put X, short two puts Y, long put Z Long put X, short put Y, short call Y, long call Z Long call X, short call Y, short put Y, long put Z The decision as to how to construct the long butterfly will be influenced by several factors. The cost of the strategy may vary depending on the component options used. The trader may need to examine the most economical way of entering the position. The liquidity of the various series of options should be considered as the long butterfly may be difficult to trade at the best of times. While the use of the long butterfly implies a neutral view of the market s direction, any leaning towards bullishness or bearishness will influence the choice of component options. Since the strategy always involves the sale of options around-the-money, there is always the risk of exercise as the market price moves away from the central strike price. Whether this risk is present in the case of a market rise or a market fall, will depend on whether calls, or puts, or a combination of the two, have been sold. If the trader has built understanding long butterfly using only calls, a rise in the market introduces the risk of exercise. If only puts have been used, a fall in the market exposes the trader to the same risk. Therefore, any directional view of the market the trader holds may suggest one way of structuring the long butterfly in preference to another. The second of the three alternatives listed above suggests the long butterfly can be thought of as an extension of the short straddle. The outer wings act as protection in case of a sharp move in the market. A sharp market move can be devastating to the short straddle, whereas the loss is limited for the holder of a long butterfly. Once the stock price moves beyond the strike price of one of the outer legs, the trader is protected from any further loss. 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Option Theory Basics An option is a traded security that is a derivative product. By derivative product we mean that it is a product whose value is based upon, or derived. Finance Futures and Options Review Notes for Final Exam Chapter 9 1. TRADING STRATEGES INVOLVING OPTIONS Unless otherwise stated the options we consider are all European. Toward the end of this chapter, we will argue that if European options were available with. EXCHANGE TRADED OPTIONS A SELF STUDY GUIDE TO TRADING EQUITY OPTIONS NZX EDUCATION This document is provided for general information purposes and is not intended as, and shall not constitute, investment. OPTIONS EDUCATION GLOBAL TABLE OF CONTENTS Introduction What are FX Options? Trading ITM, ATM and OTM Options Trading Strategies Glossary Contact Information 3 5 6 8 9 10 16 HIGH RISK WARNING: Introduction to Index Futures and Options Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice. Iron Butterfly And Condor Slices by Tony Saliba and Joe Corona Capturing Trend Transitions Iron Butterfly And Condor Slices This option strategy may be effective. Options Understanding options trading Although Australian Stock Exchange Limited has made every effort to be accurate, it does not guarantee the accuracy of the information in this booklet. Index Options 9 Pricing Factors Underlying Instrument. Graph the profits and losses at expiration for various. What You Must Know About Option Spread Trading ETFs The Lower Risk Strategy Offering Big Potential Gains What You Must Know About Option Spread Trading The Lower Risk Trading Strategy Offering Big Potential. Important Information Changes to this Product Disclosure Statement PDS that are not considered to be materially. Return to Risk Limited website: Introduction Welcome Congratulations on getting started with the Options Trader. 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OPTIONS EDUCATION GLOBAL OPTIONS EDUCATION GLOBAL TABLE OF CONTENTS Introduction What are FX Options? Introduction to Index Futures and Options Introduction to Index Futures and Options Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice More information. Iron Butterfly And Condor Slices by Tony Saliba and Joe Corona Capturing Trend Transitions Iron Butterfly And Condor Slices This option strategy may be effective More information. Understanding options trading Options Understanding options trading Although Australian Stock Exchange Limited has made every effort to be accurate, it does not guarantee the accuracy of the information in this booklet. Index Options 9 Pricing Factors Underlying Instrument More information. Payoffs and Option Strategies. Answers to Questions and Problems 11 Option Payoffs and Option Strategies Answers to Questions options Problems 1. 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