You can choose to sort strategies based on aggressiveness, from low to high or high to low. The low, medium, and high aggressiveness rating of a strategy provides a quick way to assess how likely the strategy is to realize a profit. Each version of a particular strategy (for example, one version of a long call might be a long call with a strike higher than the current price, and another a long call with a strike closer to the current price) is pre-labeled with this aggressiveness rating, relative to other setups within that strategy. Generally, a strategy with a higher level of aggressiveness has a lower chance of realizing a profit. But when a profit is realized, the return on investment will typically be higher for the more aggressive strategy.
See a sample of strategies and their aggressiveness ratings below:
Bullish Strategies
Bullish Strategies with High Aggressiveness
- Long Call (where strike is equal to or just below your target price, when target price is greater than spot price).
- Short Put (at or just below the spot price).
- Bull Call Spread (with long call at the target price and a short call at a much higher strike price, when target price is higher than the spot price).
- Bull Put Spread (with long put at target price and short put at much higher strike).
- Short Ratio Bull Spread (with three long calls at strike between the target and spot price, and a short call at spot price).
Bullish Strategies with Medium Aggressiveness
- Long call (at the spot price).
- Short put (at a strike much lower than the spot price).
- Bull Call Spread (with long call at the spot price and short call at target price when target price is higher than the spot price).
- Bull Put Spread (with long put at spot price, and short put at target price).
- Ratio Bull Spread: (with long call at spot price and two short calls at strike higher than target price).
- Ratio Bull Spread (with long call at spot price and three short calls at strike higher than target price).
- Bull Risk Reversal (with long call at strike higher than spot and lower than target, and short put at much lower strike).
- Bull Butterfly Spread (with long call at strike just below or just above your target price, and 2 short calls at target price).
- Bull Condor Spread (with long call at strike much lower than target, short call at strike just below target price and higher than previous leg's strike, short call at strike just above target, and long call at strike much higher than the target price).
- Long Call Ladder Spread (with long call at spot price, short call at strike just above target price, and short call at strike higher than first strike).
Bullish Strategies with Low Aggressiveness
- Bull Call Spread (with long call at strike lower than spot price, and short call at spot price).
- Bull Put Spread (with long put at strike lower than spot price, and short put at spot price).
Bearish Strategies
Bearish Strategies with High Aggressiveness
- Long put (where strike is equal to or just above your target price, when target price is below the spot price).
- Short call (at or just above the spot price).
- Bear Put Spread (with long put at the target price which is lower than spot, and a short put at strike lower than target price).
- Bear Call Spread (with long call at target price, and a short call at much lower strike price when target price is lower than current spot price).
- Short Ratio Bear Spread (with three long puts at strike between the target and spot price, and a short put at spot price).
Bearish Strategies with Medium Aggressiveness
- Long put (at the spot price).
- Short call (at strike much higher than the spot price).
- Bear Put Spread (with long put at the spot price and short put at target price).
- Bear Call Spread (with long call at spot, and short call at target price when target price is lower than the spot price).
- Ratio Bear Spread (with long put at spot price, and two short puts at strike lower than target price).
- Ratio Bear Spread (with long put at spot price and three short puts at strike lower than target price).
- Bear Risk Reversal (with long put at strike higher than target but lower than spot, and short call at much higher strike).
- Bear Butterfly Spread (with long put at strike lower than target, two short puts at target, and a long put at strike higher than target).
- Bear Condor Spread (with long put at strike much lower than target, short put at strike just below target and higher than previous leg's strike, short put at strike just above target, and long put at strike much higher than the target price).
- Long Put Ladder Spread (with long put at spot price, short put at strike just below target price, and short put at strike lower than first strike).
Bearish Strategies with Low Aggressiveness
- Bear Put Spread (with long put at strike higher than spot price, and short put at spot price).
- Bear Call Spread (with long call at strike higher than spot price, and short call at spot price).
Breakout Strategies with a Single Expiry
Breakout strategies can be used if the user expects a price move beyond a certain range. In the strategies below:
𝑝𝑚𝑖𝑑 = mid price of user' speculated range
𝐷 = speculated range size
strike1= strike2 - 𝐷
strike2= mid_price (available strike slightly <= 𝑝𝑚𝑖𝑑)
strike3= mid_price (available strike slightly >= 𝑝𝑚𝑖𝑑)
strike4= strike3 + 𝐷
Breakout Strategies with High Aggressiveness
- Short Call Ladder (only when strike2 is not equal to strike3, and with a short call at strike2, a long call at strike3, and a long call at strike4).
- Short Put Ladder (only when strike2 is not equal to strike3, and with a short put at strike3, a long put at strike2, and a long put at strike1).
- Long Straddle/Long Strangle (with a long put at strike2, and a long call at strike3)
- Short Iron Albatross (with a short put at strike lower then strike1, a long put at strike1, a long call at strike4, and a short call at at strike higher than strike4).
Breakout Strategies with Medium Aggressiveness
- Short Condor (with a short call at strike1, a long call at strike2, a long call at strike3, and a short call at strike4).
- Short Iron Condor (with a short put at strike1, a long put at strike2, a long call at strike3, and a short call at strike4).
- Short In-The-Money Iron Condor (with a short call at strike1, a long call at strike2, a long put at strike3, and a short put at strike4).
- Call Ratio Back Spread (with a short call at strike1, and two long calls at strike3).
- Put Ratio Back Spread (with a short put at strike4, and two long puts at strike2).
Rangebound Strategies with a Single Expiry
Rangebound strategies are used when the user expects a price move within a certain range. In the strategies below:
strike1= strike2 - 𝐷
strike2= mid_price (available strike slightly <= 𝑝𝑚𝑖𝑑)
strike3= mid_price (available strike slightly >= 𝑝𝑚𝑖𝑑)
strike4= strike3 + 𝐷
Rangebound Strategies with High Aggressiveness
- Short Straddle/Short Strangle (with a short put at strike2 and a short call at strike3).
- Long Iron Albatross Spread (with a long put at a strike lower than strike1, a short put at strike1, a short call at strike4, and a long call at a strike higher than strike4.
Rangebound Strategies with Medium Aggressiveness
- Long Condor (with a long call at strike1, a short call at strike2, a short call at strike3, and a long call at strike4).
- Long Iron Condor (with a long put at strike1, a short put at strike2, a short call at strike3, and a long call at strike4)
- Long In-The-Money Iron Condor (with a long call at strike1, a short call at strike2, a short put at strike3, and a long put at strike4).
- Call Ratio Back Spread (with a long call at strike1, and two short calls at strike3).
- Put Ratio Back Spread (with a long put at strike4 and two short puts at strike2).
Volatility Strategies with a Single Expiry
Volatility strategies are used when the user expects a volatility move to the upside or downside.
Volatility Up Strategies
𝑝 = forward price
𝐷 = forward * volatility * 1.5
strike1= strike2 - 𝐷
strike2= mid_price (available strike slightly <= 𝑝)
strike3= mid_price (available strike slightly >= 𝑝)
strike4= strike3 + 𝐷
Volatility Up Strategies with High Aggressiveness
- Short Call Ladder (only when strike2 is not equal to strike3, and with a short call at strike2, a long call at strike3, and a long call at strike4).
- Short Put Ladder (only when strike2 is not equal to strike3, and with a short put at strike3, a long put at strike2, and a long put at strike1).
- Long Straddle/Long Strangle (with a long put at strike2, and a long call at strike3)
- Short Iron Albatross (with a short put at strike lower then strike1, a long put at strike1, a long call at strike4, and a short call at strike higher than strike4).
Volatility Up Strategies with Medium Aggressiveness
- Short Condor (with a short call at strike1, a long call at strike2, a long call at strike3, and a short call at strike4).
- Short Iron Condor (with a short put at strike1, a long put at strike2, a long call at strike3, and a short call at strike4).
- Short In-The-Money Iron Condor (with a short call at strike1, a long call at strike2, a long put at strike3, and a short put at strike4).
- Call Ratio Back Spread (with a short call at strike1, and two long calls at strike3).
- Put Ratio Back Spread (with a short put at strike4, and two long puts at strike2).
Volatility Down Strategies
𝑝 = forward price
𝐷 = forward * volatility * 1
strike1= strike2 - 𝐷
strike2= mid_price (available strike slightly <= 𝑝)
strike3= mid_price (available strike slightly >= 𝑝)
strike4= strike3 + 𝐷
Volatility Down Strategies with High Aggressiveness
- Short Call Ladder (only when strike2 is not equal to strike3, and with a short call at strike2, a long call at strike3, and a long call at strike4).
- Short Put Ladder (only when strike2 is not equal to strike3, and with a short put at strike3, a long put at strike2, and a long put at strike1).
- Long Straddle/Long Strangle (with a long put at strike2, and a long call at strike3)
- Short Iron Albatross (with a short put at strike lower then strike1, a long put at strike1, a long call at strike4, and a short call at strike higher than strike4).
Volatility Down Strategies with Medium Aggressiveness
- Short Condor (with a short call at strike1, a long call at strike2, a long call at strike3, and a short call at strike4).
- Short Iron Condor (with a short put at strike1, a long put at strike2, a long call at strike3, and a short call at strike4).
- Short In-The-Money Iron Condor (with a short call at strike1, a long call at strike2, a long put at strike3, and a short put at strike4).
- Call Ratio Back Spread (with a short call at strike1, and two long calls at strike3).
- Put Ratio Back Spread (with a short put at strike4, and two long puts at strike2).
This article may contain links to third party websites and information, which are provided for educational purposes only. The broker does not warrant or in any way guarantee any third-party information that is provided. All links and information therein are subject to change. Probability of Profit is a mathematical expression based on accepted industry options pricing and statistical distribution models. Probability of Profit is for informational purposes only and is not a recommendation. Probability of Profit does not consider any individual investor’s financial profile, investment objectives, or other factors that would typically be used when making recommendations.
Probability of Profit does not consider any individual investor’s financial profile, investment objectives, or other factors that would typically be used when making recommendations. The Probability of Profit calculation does not include fees or commissions.
Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options” that you can find on the OCC website.