In the actual practice of options, investors often need to construct various portfolios to respond to different market conditions and investment objectives. Here are some commonly used option combinations and their features:
1.Vertical spread combinations
A vertical spread combination is the purchase of a call or put option with a higher exercise and a call or put option with a lower exercise. This combination is characterized by relatively limited risk and return, and is suitable for investors who have a certain amount of risk on market movements but do not want to take too much risk.
2.Horizontal spread combinations
A horizontal spread combination is the purchase of a call or put option exercising at a certain level, and at the same time exercising a call or put option that deviates from that level. This combination is characterized by relatively high risk and return, and is suitable for investors who have a more accurate view of market movements** and are willing to take higher risks.
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Share daily. 3.Straddle combinations
A straddle is the simultaneous purchase of one call option and one put option with the same exercise**. This combination is characterized by the ability to obtain returns when the market fluctuates sharply, but it is more risky, and is suitable for investors who have a strong judgment of market movements.
4.Strangle combination
A stranglehold combination is the simultaneous purchase of a call option and a put option, both with the same exercise** and expiration date. This combination is characterized by the ability to obtain returns in anticipation of increased market volatility, but it is also risky, and is suitable for investors who have a more accurate view of market movements**.
5.Protective call or put options
A protective call or put option is the purchase of a corresponding call or put option while holding the underlying asset. This combination is characterized by its ability to protect the underlying asset from ** risks, and is suitable for investors who want to preserve value or limit the extent of losses.
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Share daily. These are some of the commonly used options combinations, but there are actually many other combinations to choose from. When constructing an options portfolio, investors should choose the appropriate combination method based on their investment objectives, risk tolerance and market trend judgment.