A trader can enter into various bullish options strategies for a bullish market depending on the strength of the bullish pull.
However, there are nine different and commonly used bullish options strategies given below:
Buying a call is the most basic and simple of all options strategies. It develops the first options trade for an individual who is already well versed with buying and selling stocks and would now want to trade options.
Buying a call strategy is simple to understand. When you buy a call, it means you are bullish. Buying a Call means you are very bullish, and you’re expecting the underlying index or stock to move upward in the future.
Short put means an investor is ready to buy an underlying asset at a calculated price in the future date. An investor will gain benefit if the price rise in the future.
However, applying this strategy contains risk because it involves purchasing the physical asset, which later on increases their risk volume.
It means an investor is buying an in-the-money (ITM) call option and selling another out-of-the-money (OTM) call option.
The premium is majorly collected from selling a call option is used to balance the premium paid for the long call.
Bull put spread needs two transactions that are buying one bull put and simultaneously selling another. However, it is considered a complicated strategy because of the high stakes involved, which is clearly not recommended for all beginners.
Bull ratio spread delivers more flexibility, but it seems like a complex strategy. Bull call spread involves two calls, i.e., buying and writing to spread in a ratio.
Usually, an investor sells more than what he/she buys. Using this strategy, they can profit even when asset price decreases or there is no expected rise.
But this strategy is recommended and suits more experienced traders and not for new investors.
Traders can enter into a short bull ratio spread when they have faith and are pretty confident that asset price will significantly move upwards but also at the same time have the courage to cover for any loss in case the price falls.
It involves two transactions of writing calls and buying calls with a lower strike rate for the same underlying and expiration date.
Bull butterfly spreads consist of two types, i.e., call bull butterfly and put bull butterfly. However, a bull butterfly is a complex strategy that creates a debit spread and involves three transactions.
There are two different types of bull condor spread, i.e., call and put condor spread. This strategy creates a debit spread around four different transactions.
Several traders apply it to minimize the cost, which is upfront and optimize profit when they are confident that security prices will move upward to their level of expectation.
Bull call ladder spread consists of buying one call and writing two calls simultaneously, containing different strikes.
Traders can also enter at various times into a leg by trading the call options to gain profit.
