Part 4 Institutional Trading

Intermediate Strategies
(a) Bull Call Spread

Buy a call at lower strike and sell a call at higher strike.

Reduces cost but caps profit.

Good for moderately bullish markets.

(b) Bear Put Spread

Buy a put at higher strike, sell a put at lower strike.

Used in moderately bearish markets.

(c) Straddle

Buy one call and one put at the same strike and expiry.

Profits if stock makes a big move in either direction.

Expensive, requires high volatility.

(d) Strangle

Buy OTM call + OTM put.

Cheaper than straddle but needs a larger price move.

(e) Iron Condor

Combination of bull put spread + bear call spread.

Profits when price stays in a range.

Great for low-volatility environments.