Category Archives: FAQ

Long Stock

A long stock is an expression used when you own shares of a company. It represents a claim on the company’s assets and earnings. As you increase your holdings of a stock, your ownership stake in the company increases. Read this post to learn about the components of a long stock, and what it looks like graphically.

Strangle Spread

A Strangle is a volatility bet where you simultaneously long a call at Strike Price 2 and long a put at Strike Price 1. This article describes the differences between a strangle and straddle spread, as well as what a strangle spread includes.

Straddle

This article describes Straddles, which are a volatility bet where you simultaneously long a call at Strike Price 1 and long a put at Strike Price 1. This creates a triangular shaped payoff and profit graph where the reward is based on the volatility of the stock. Click here for more details.

Collar Spreads

A bullish collar is a protection strategy where you simultaneously buy a call at strike price 1 and sell a put at strike price 2. This strategy is for investors who has a bullish perception on the underlying asset. We can also create a “bearish” collar by simultaneously buying a put at strike price 1 and selling a call at strike price 2.

Ratio Strategy

A ratio strategy is an option strategy that is created by having X amount of call options at Strike Price 1 and shorting Y amount of call options at Strike Price 2. This post gives you what you need to know about when and why to use ratio strategies, what their payoff and profit graphs look like, and what the break-even point is,

Bear Spread

A bear spread is a strategy where you simultaneously sell a put at Strike Price 1, and buy a put at Strike Price 2. Read this article to find out when and why you should have a bear spread, what payoff and profit graphs look like, and what the break-even point is.

Bull Spreads

A bull spread is a strategy where you simultaneously buy a long call at Strike Price 1, and sell a call for Strike Price 2. Read this article to learn about when and why you should use a bull spread, what the payoff and profit graphs look like, and what the break-even point is.