Index Option Strategies

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S & P 500 Strategies (SPX)

Buying SPX Calls:

Buying an SPX call is one of the simplest and most popular strategies used by option investors employing SPX index options.

Buying SPX Puts:

Buying an SPX put is one of the simplest and most popular bearish strategies used by investors employing SPX index options.

Buying SPX Straddles:

Buying an SPX straddle combines the benefits of both an SPX call and an SPX put purchase.

SPX Bull Call Spreads:

This spread allows an investor the opportunity to profit to a limited extent from a limited move in the level of the SPX, while having less capital at risk than with the outright purchase of a call option.

SPX Bear Put Spreads:

This spread allows an investor the opportunity to profit to a limited extent from a limited move in the level of the SPX, while having less capital at risk than with the outright purchase of a put option.

Buy SPX LEAPS Calls - Bullish: (PDF Download)

An investor who is bullish on stock market prices over the next couple of years could consider index LEAPS (Long-term Equity AnticiPation SecuritiesTM) calls.

Protective Puts with SPX Options: (PDF Download)

Purchasing stock index put options permits an investor to hedge equity market risk by limiting downside risk while retaining upside potential.

Protective Collar with SPX Options: (PDF Download)

The protective S&P 500 collar strategy provides downside protection through the use of index put options, and finances the purchase of the puts through the sale of short index call options, in effect trading away some upside potential.

Long SPX Call Options to Gain Market Exposure: (PDF Download)

S&P 500 index option contracts can provide an investor with the market exposure necessary to participate in upside gains at a fraction of the cost of transacting in the index components.