Thursday, May 28, 2009

Speculative Options Strategies

GENERAL PRINCIPLES OF SPECULATIVE STRATEGIES:

A speculative option strategy is one which attempts to profit if the market price of the underlying security rises or falls.

Therefore, to define a strategy, it is essential to establish in advance the market trend.

Strategies which profit from a rising market are “bull” strategies.

Strategies which profit from falling markets are “bear” strategies.


Speculative strategies involve the higher risk.
Financial risk is synonymous of loss.

Anything that you win, your counterparts, lose it.
This is called a zero-sum game.


There are four speculative strategies:
LONG CALL
LONG PUT
SHORT CALL
SHORT PUT


The purchase of a call (long call) or the sell a put (short put) will give the speculator a profit in a rising market. These are BULL strategies.

The purchase of a put (long put) or the sale of a call (short call) will give the speculator a profit in a falling market. Therefore, are BEAR strategies.

These topics are covered in depth in our seminars.
Write to hallazgofinanciero@gmail.com to contact us and learn all the strategies to make money in the markets.

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