Product-Specific Strategies

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VIX:
S & P 500 (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.

S & P 100 (OEX):

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

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

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

OEX 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 OEX, while having less capital at risk than with the outright purchase of a call option.

OEX 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 OEX, while having less capital at risk than with the outright purchase of a put option.

OEX Bear Put Spread: (PDF Download)
An investor who is bearish on the S&P 100 in the short term could consider a Bear Put Spread - buy a put at a strike price, and sell a put at a lower strike price.

Neutral to Moderately Bullish on XEO: (PDF Download)
An investor who is neutral to moderately bullish on the S&P 100 might consider a Short Put Spread on S&P 100 options (XEO) with European-style exercise - sell OEX puts at a strike price, and buy OEX puts at a lower strike price.

Buying OEF Call Options - Bullish: (PDF Download)
An investor who is bullish on S&P 100 prices in the short term could consider purchasing OEF call options.

Dow Jones (DJX):

Dow (DJX) Bull Call Spread (PDF download):
If an investor is bullish on the DJX, one possible strategy to consider is a DJX Bull Call Spread - buy calls at a lower strike price, and sell calls at a higher strike price.

Bullish on Blue Chips - Buy DJX Calls (PDF download):
There is limited risk but unlimited profit potential for a long call position in DJX options.

Nasdaq 100 (NDX):

Bull-call Spread with Nasdaq-100® (NDXTM) Options (PDF download):
If an investor is bullish on the NDX, one possible strategy to consider is a NDX Bull Call Spread - buy calls at a lower strike price, and sell calls at a higher strike price

Volatility Strategy - Long Mini-NDX (MNX®) Straddle (PDF download):
If an investor believes that the VIX® and VXNSM indexes are at relatively low levels, and that volatility could increase in the near future, one strategy that could be considered is a long straddle, where the investor buys index calls and puts.

QQQ Collar - Low-cost Protection of Tech-oriented Portfolio (PDF download):
The protective QQQ 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.

QQQ Buy-write for Added Income (PDF download):
A "buy-write" or “covered call” strategy can appeal to:

  1. An investor who is neutral to moderately bullish on some equities in his/her portfolio;
  2. An investor who is willing to limit his/her upside potential in exchange for some downside protection; and
  3. An investor who would like to be paid for assuming the obligation of selling a particular stock at a specified price.
Russell 2000 (RUT):

Buy Calls on Russell 2000® (RUTSM) - Anticipate "January Effect" (PDF download):
An investor who has researched the January Effect and who has a short-term bullish outlook for small-cap-stocks near the end of the calendar year could consider buying call options on the Russell 2000 in order to participate in upside moves of small-cap stocks while minimizing the downside risk exposure.