Dynamic Option Strategies

Stapler:

Stapler allows the user to change size of his order for each dynamic option strategy uniformly.

Stapler ON; if you adjust size for 1 strategy leg, all strategy legs simultaneously adjust according to the pre-loaded strategy proportions.

Stapler OFF; adjusting size for 1 strategy leg, affects only the relevant leg and nothing else.

Call Spread Option Contract

A Call Spread Option Contract is a contract that gives the buyer (the owner or holder of the contract) the right to receive an amount in Strike Currency equal to the difference between the Reference Price and the Lower Strike Price of the Underlying Currency, if the Reference Price is above the Lower Strike Price and equal or below the Upper Strike Price. If the Reference Price is above the Upper Strike Price, the buyer has the right to receive an amount equal to the difference between the Upper Strike price and the Lower Strike Price. The contract seller has the corresponding obligation to pay the described amount upon exercise of the contract.

Call spread:

User goes long a lower strike call option and simultaneously goes short a higher strike call option.

User pays premium to enter the trade and can think of the strategy as a risk vs reward strategy at the higher strike and beyond.

User pays Premium and earns a multiple of the premium spent if underlying price at expiration greater than higher strike.

СK- Св

Call spread with lower strike K and upper strike B

Payout at expiry = max(ST - K, 0) - max (ST - B, 0)

Eg. Payout of a call spread on eth/§ with K=100 and B=115

Put Spread Option Contract

A Put Spread Option Contract is a contract that gives the buyer (the owner or holder of the contract) the right to receive an amount of Strike Currency equal to the difference between the Upper Strike Price and the Reference Price of the Underlying Currency , if the Reference Price is below the Upper Strike Price and equal or above the Lower Strike Price. If the Reference Price is below the Lower Strike Price, the buyer has the right to receive an amount equal to the difference of the Upper Strike Price and the Lower Strike Price. The contract seller has the corresponding obligation to pay the described amount upon exercise of the contract.

Put spread:

User goes long a higher strike put option and simultaneously goes short a lower strike put option.

User pays premium to enter the trade and can think of the strategy as a risk vs reward strategy at the lower strike and beyond.

User pays Premium and earns a multiple of premium spent if underlying price at expiration lower than lower strike.

РK- PB

Put spread with upper strike K and lower strike B

Payout at expiry = max(K - ST, 0) - max (B-ST, 0)

Eg. Payout of a put spread on eth/S with K=100 and B=85

Risk Reversal:

User goes long a call option and simultaneously sells a put option. If user picks the ATM strike for both legs one synthetically replicates being long the underlying asset.

User can pick more out of the money strike for the respective legs, the strikes of the call and the put do not have to be symmetric.

Call Ladder:

A long call ladder consists of buying a call at one strike and selling 2 calls at each of two higher strikes.

User earns premium to enter the trade but posts collateral; ( collateral requirement can get mitigated by entering into a long farther out of the money call option; a call condor ).

Put Ladder:

A long put ladder consists of buying a put at one strike and selling 2 put at each of two lower strikes.

User earns premium to enter the trade but posts collateral; ( collateral requirement can get mitigated by entering into a long farther out of the money put option; a put condor ).

Straddle:

A long straddle consists of simultaneously buying a call option and a put option with the same strike.

Strangle:

A long strangle consists of simultaneously buying a call option and a put option of different strikes; the default strangle loaded presents symmetric strikes approximately around spot.

Call Condor:

A long call condor consists of four different call options of the same expiration. 1 long in the money call, 1 short higher strike call, 1 short even higher strike call, 1 long highest strike call.

One can think of the strategy involving going simultaneously long a lower strike pair call spread and short a higher strike pair call spread.

Put Condor:

A long put condor consists of four different put options of the same expiration. 1 long in the money put, 1 short lower strike put, 1 short even lower strike put, 1 long lowest strike put.

One can think of the strategy involving going simultaneously long a higher strike pair put spread and short a lower strike pair put spread.

Iron Condor:

An iron condor consists of 2 option pairs. Selling a put spread ( selling a closer to the money put and buying an out of the money put ) and selling a call spread ( selling a closer to the money call and buying an out of the money call ); one earns premium which is the highest potential upside of the trade and posts collateral.

Call Butterfly:

A call butterfly consists of buying a lower strike call, selling 2 higher strike calls and buying a highest strike call. One pays premium to possess maximum upside at the middle strike at expiry.

Put Butterfly:

A put butterfly consists of buying a lower strike put, selling 2 higher strike puts and buying a highest strike put. One pays premium to possess maximum upside at the middle strike at expiry.

Dynamic Option Strategies

Long / shorts in all

Call spread

Put spread

Risk reversal

Call spread 1x2

Put spread 1x2

Call ladder ( buy x1, sell x2, sell x3 ) x1<x2<x3

Put ladder ( buy x1, sell x2, sell x3 ) x1> x2 > x3

Straddles

Strangles

Call condor ( buy x1, sell x2, sell x3, buy x4 ) x1<x2<x3<x4, x2-x1 = x4 - x3

Put condor ( buy x1, sell x2, sell x3, buy x4 ) x1<x2<x3<x4, x2-x1 = x4 - x3

Iron condor ( sell put spread | sell call spread )

Call butterfly ( buy 1 x1, sell 2 x2, buy 1 x3 ) x1<x2<x3

put butterfly ( buy 1 x1, sell 2 x2, buy 1 x3 ) x1<x2<x3