Talk:Options strategy

This is a good place for discussion on a better organization for all the stub articles that are some type of option strategy or combination.

Smallbones 02:27, 16 September 2007 (UTC)

:Boy there are a ton of articles, spread out that don't say much individually on these topics. Is there a place to discus a better form of organization? Or do you have a draft plan?

:As for specific questions raised on Bull call spread, I'd (personally) like to see it focused on the net payoffs on the exipiration date - I mean what is really the difference between a bull call spread and a bull put spread?? This would suggest that credit and debit spreads are simply a technical point. But others might have a better organization plan.

:Let me know what I can do. But I'd start with rewrites on most of these articles for style (more simple straightforward info, and less "instructions")

:Smallbones 02:07, 16 September 2007 (UTC)

:::Hi, Smallbones, I agree that there are way too many pages that have very little information, but I don't know the best way to organize everything. But you're right, as a first step, we should probably merge the pages to form Bull spread and Bear spread because the payoffs are the same. By put-call parity, it doesn't matter whether you use puts or calls to execute your strategy. Finnancier 02:19, 16 September 2007 (UTC)

::::I'll see what I can do to merge bull call and bull put spreads into one, but tomorrow. BTW, I did the graph on Bull call spread and have mixed feelings on it. Is it good enough? Would others help for similar articles? Let's focus the discussion on Options strategies a a central point for discussion.

::::Smallbones 02:25, 16 September 2007 (UTC)

:::::Okay, I'll move the material into Bull spread and Bear spread first, and you can merge them tomorrow. I like your payoff diagrams, they're very useful. Finnancier 02:32, 16 September 2007 (UTC)

Shouldn't an encyclopedic article on options be a bit more abstract and not say specifically that these are stock options? Shouldn't it talk about options in general as you can have options on bonds, currencies, commodities and even other financial and non-financial assets? I just think that this article should have all references to stock options (except any areas that specifically discuss stock options) removed and replaced with the word 'asset' or something like that. So the first sentence would change from "...and possibly an underlying stock position." to "...and possibly an underlying asset position." What are other people thinking about this and does anyone have a better work than asset?Terets (talk) 13:36, 13 December 2009 (UTC)

This is the exact same topic. I may eventually rewrite these articles. TraderCharlotte (talk) 03:07, 31 July 2022 (UTC)

• Support! Even though not all options strategies involve spreads, every options spread is a strategy. So, basically it would work better as a section in the options strategy article. Vgbyp (talk) 12:03, 31 July 2022 (UTC)

• Support - I think this makes sense, the article as it stands is confusing as it is out of context. Sargdub (talk) 02:08, 11 May 2023 (UTC)

:{{merge done}} Klbrain (talk) 21:21, 19 August 2023 (UTC)

I've seen a strategy called The Wheel in a few beginners' books on options. Could you put a quick discussion of it in here, or if you say so in a separate article? The basic idea is:

1. Sell out-of-money puts on a stock, with delta at say -0.3 and expiration roughly 1 month hence, with enough money on the side to cover the puts if the stocks flop. About 70% of these puts will expire worthless and you keep the premium.

2. About 30% of the puts will expire in-the-money. You acquire stocks at a low price and your effective purchase price is even lower than the decreased market price since you received the premium. =>

3. Sell out-of-money covered calls on your stock, with delta at say 0.3 and expiration roughly 1 month hence. About 70% of those calls will expire worthless and you keep the premium.

4. About 30% of the calls will expire in-the-money, at a favorable price and besides you get the premium. This gives you money with which you can go back to step 1, etc., round and round, hence the name.

Possibly this is more profitable on average than buying options, since the buyer retains control and the seller retains the potential obligation and hence risk. Also the beginners' books claim that this strategy's profitability is much less sensitive to the underlying stock's price movement than buying calls or puts. Are the books right? 64.179.154.8 (talk) 21:23, 6 June 2025 (UTC)