Options Trading Strategies Builder
Create your own options trading strategy without coding it. Try our option strategy builder and backtest your options trading strategy.
Derivative instruments like Options are complex in nature, and the strategies built around them are even more complex. Options strategies can be created with single-leg, multi-leg contracts. These contracts allow you to trade in all market conditions. So maintain your focus on building your option strategies.
Try Option trading strategy builder by SpeedBot, You will be able to create a deeply customized strategy just the way you want within minutes. This strategy builder is also very user friendly. So even if you are fairly new to options & trading, you will still be able to use it with ease.
14 Option Trading Strategies :
In fact, study a few strategies and apply your trading brain over it to see what works for you best. So below we have discussed generic options trading strategies for different market conditions. They are based on Bullish, bearish & sideways/range bound markets. Let’s get going :
2) Bull Call Spread
This is a 2-Leg strategy & trading is done with 2 or more options. You buy ATM Call options in 1st Leg and Sell OTM Call options in 2nd Leg. But, always make sure all the options in both legs are from a series of the same expiry.
3) Bull Put Spread
Also, wider the spread, higher is the amount of risk associated with it. Consider using this when the market has some good amount of volatility.
4) Call Ratio Back Spread
That’s why big movements are important for this strategy. Unlike previous 2 strategies, this strategy has a 3-Legged approach. First 2 Legs involves buying OTM call options and 3rd leg involves selling ITM call options. This 2:1 ratio must be maintained.
5) Bear Call Ladder
This options trading strategy has a 3-Legged approach. It is operated in a 1:1:1 ratio. Here you buy 1 ATM call & 1 OTM call and Sell 1 ITM call option. This pattern has to be followed to operate in this strategy. This can be multiplied however. You can operate in 3:3:3 ratio, 5:5:5 ratio and so on.
6) Synthetic Long
7) Bear Put Spread
Biggest benefit of Bear put spread strategy is that it is Low risk. Traders with an extra cautious approach use this a lot. It results in Lower profit margins but at the same time is much more secure against making Losses. Always remember to pick all options in the same expiry range & they should belong to the same underlying asset.
8) Bear Call Spread
This is very similar to our previous strategy. Only difference is you bought Put options previously, here you will buy Call options to create a spread. You should definitely go with this strategy if you are predicting the volatility in the market to Increase. That will increase your profit chances for good.
9) Put Ratio Back Spread
The biggest thing to note here is that this Strategy must be deployed when you are expecting Bigger market movements - downside or upside. Not suitable for small market movements. You make money in both cases of the market going down and going up, but it’s important that the market moves Big amount.
10) The Long Straddle
It’s market volatility. Here you concurrently Buy an ATM call option and Buy an ATM put option. Preferably buy when market volatility is Lower. Then if the market moves a big amount before the option expiry period, you make profits. The volatility must increase after you set-up your Straddle.
11) The Short Straddle
So, a really preferable approach when you predict the market to NOT make big movements. Here you sell the ATM call option & ATM put option. As you are selling options here, you will get Cash flowing into your account. A net credit strategy at the end.
12) The Long & Short Strangle
Long Strangle: Trader buys 1 OTM Call option and 1 OTM put option concurrently. You have to maintain a 1:1 ratio. Multiplication is fine i.e. 2:2, 5:5. But the 1:1 balance must be maintained.
Short Strangle: This is the exact opposite of a long strangle. Here you would be selling OTM call & OTM put options. For obvious reasons, since this is a ‘short’ strangle. To make money with Strangles, the market volatility must increase while you are in the trade & Before the option expires.
13) Max Pain & PCR Ratio
PCR Ratio :
PCR ratio is
Total option interest rate of puts
total open interest rate of calls
. Now this ratio helps traders decide the Bear/Bull behavior of the market. If the ratio suggests Bull, then the market is expected to show ‘Bearish’ behavior, and vice versa.
14) Iron Condor
Iron condor is a protective mechanism version of Short strangle. Here you deal with Long OTM calls and Long OTM puts. These OTM calls will cover the both side ends of your short strangle. Hence reducing your loss potentials significantly. Some reduction in profit is possible, but the protection you get is supremely beneficial.
Benefits of using SpeedBot for Options Trading Strategy Builder
First of all, SpeedBot is an extremely user-friendly tool. This tool can be used very easily even if you have zero experience with option trading or even if you are a pro trader. So you can focus more on your trading & not have to worry about how to use the tool.
Additionally SpeedBot lets you create extremely customized trading strategies just the way you want. You don’t have to select from only the available options. You can build your strategy from scratch as well as deeply customize it. This ensures your entire strategy works 100% the way you want. Giving you your best shot at achieving higher trading returns.
Last but not least: SpeedBot is brilliantly tech-powered on the back-end with artificial intelligence and machine learning technologies. So it will guide you with strategy building based on not just historical data, but with past market movements, behavioral patterns formed before and so many other things. Enabling you to come out with Rock solid option trading strategies.
FAQs Related to Option Strategy Builder
Options Strategy Builder is a backtesting and execution tool specifically for options strategies in Nifty & Bank Nifty Options. Strategy creators can backtest options strategies since 2019.
Strategy creators can create easy to complex Options Trading Strategies using SpeedBot's Options Strategy Bot Builder. To know more about options trading strategies you can explore the options trading strategies page.
SpeedBot's Options Bot Builder can backtest a wide range of time-based options strategies in momentum to sideways market conditions. Current week, Next week, Current month and Next month expiries can be selected to backtest assorted options trading strategies.
Creation of Options Strategies can be done in the Options Bot Builder which can backtested as well as traded in Live and Paper Trading Mode.
Strategy creators can create easy to complex Options Trading Strategies using SpeedBot's Options Strategy Bot Builder. To know more about the options trading strategies you can explore options trading strategies page.