What are Options?
Before we dive into advanced stuff, here’s a quick refresher.
An Option is a contract that gives you the right (but not the obligation) to buy or sell a stock/index at a certain price, on or before a certain date.
There are 2 types:
Call Option – Right to BUY
Put Option – Right to SELL
Buyers pay a premium. Sellers receive a premium and take on the obligation.
💼 Why Use Advanced Strategies?
If you only buy calls or puts, you might:
Lose 100% of your capital quickly
Get the direction right, but still lose due to time decay
Suffer from high premiums or volatility crush (IV crush)
Advanced strategies help you:
✅ Reduce risk
✅ Lock-in profits
✅ Earn from sideways markets
✅ Trade during high volatility events
✅ Create income strategies
🧠 1. Bull Call Spread – Directional but Risk-Defined
Used when: You’re moderately bullish, but don’t want to spend too much on a call.
How it works:
Buy 1 ATM Call
Sell 1 higher strike OTM Call
Example:
Nifty at 22000
Buy 22000 CE @ ₹100
Sell 22200 CE @ ₹40
Net Cost = ₹60
Max Profit: ₹200 (22200–22000) – ₹60 = ₹140
Max Loss: ₹60 (net premium paid)
👉 This strategy caps your risk and reward but is cost-efficient and smart in range-bound bull moves.
🧠 2. Bear Put Spread – Controlled Downside Betting
Used when: You’re mildly bearish and want to control losses.
How it works:
Buy 1 ATM Put
Sell 1 lower strike Put
Example:
BankNifty at 48500
Buy 48500 PE @ ₹120
Sell 48000 PE @ ₹60
Net Cost = ₹60
Max Profit: ₹500 – ₹60 = ₹440
Max Loss: ₹60
👉 Ideal for limited downside moves — cheaper than naked Put.
🧠 3. Iron Condor – The Sideways Market King
Used when: Market is flat or expected to stay in a range.
How it works:
Sell 1 OTM Call + Buy 1 higher OTM Call
Sell 1 OTM Put + Buy 1 lower OTM Put
You make money if market stays between the 2 sell strikes.
Example:
Nifty is at 22500
Sell 22800 CE, Buy 23000 CE
Sell 22200 PE, Buy 22000 PE
👉 You collect premiums from both sides.
Max Profit = Net Premium
Max Loss = Difference between strikes – Net Premium
👉 Works great in expiry week or low-volatility phases.
🧠 4. Straddle – Big Move Expected, Direction Unknown
Used when: A major move is expected (news, event, earnings), but unsure about direction.
How it works:
Buy ATM Call and ATM Put of the same strike & expiry.
Example:
Stock at ₹500
Buy 500 CE @ ₹20
Buy 500 PE @ ₹25
Total Cost = ₹45
If stock moves big — say ₹60 or more either way — you profit.
👉 High risk due to premium decay if market stays flat.
Need volatility to spike.
🧠 5. Strangle – Cheaper than Straddle, Wider Range
Used when: You expect a big move but want lower cost than a straddle.
How it works:
Buy OTM Call and OTM Put (strikes wider apart than ATM).
Example:
Nifty at 22500
Buy 22800 CE @ ₹12
Buy 22200 PE @ ₹10
Total Cost = ₹22
You profit if the move crosses either strike + premium.
👉 Needs bigger move than straddle but less premium at risk.
🧠 6. Calendar Spread – Play with Time
Used when: You expect price to stay near a level short term, but may move later.
How it works:
Sell near-term option
Buy far-term option (same strike)
Example:
Sell 22500 CE (weekly) @ ₹50
Buy 22500 CE (monthly) @ ₹70
Net Cost = ₹20
👉 You make money if price stays near 22500 by expiry of short leg.
Profits from time decay of the short leg.
🧠 7. Ratio Spreads – Advanced Directional with a Twist
Used when: You expect a move in one direction, but want to reduce cost.
Bull Call Ratio Spread
Buy 1 lower Call
Sell 2 higher Calls
Example:
Buy 22000 CE @ ₹100
Sell 2× 22200 CE @ ₹60 each
Net Credit = ₹20
If market moves moderately up — you profit.
But if it rises too fast — risk increases.
👉 Suitable for experienced traders only — manage risk carefully.
🧠 8. Covered Call – Income Strategy for Investors
Used when: You hold stocks and want to earn extra income.
How it works:
Hold 100 shares of a stock
Sell 1 OTM Call
Example:
You own 100 shares of Reliance @ ₹2500
Sell 2600 CE @ ₹20
If Reliance stays below ₹2600, you keep the premium.
If it rises above ₹2600, your shares get sold, but you still profit.
👉 Perfect for long-term investors.
🧠 9. Protective Put – Insurance for Your Stock
Used when: You own shares but want downside protection.
How it works:
Hold stock
Buy 1 ATM/OTM Put
Example:
Own Infosys @ ₹1500
Buy 1480 PE @ ₹20
If stock falls below ₹1480, your loss is capped.
👉 It’s like buying insurance for your portfolio.
🧠 10. Butterfly Spread – Range-Bound Precision Strategy
Used when: You expect minimal movement and want low-risk, high-RR trade.
How it works (Call Butterfly):
Buy 1 lower strike Call
Sell 2 middle strike Calls
Buy 1 higher strike Call
Example:
Buy 22000 CE
Sell 2× 22200 CE
Buy 22400 CE
You earn if market expires at the middle strike.
Max loss = Net debit
Max profit = At middle strike
👉 Best for expiry day premium decay strategies.
Common Mistakes to Avoid
Not understanding strategy risk
Using high-margin strategies without protection
Overtrading in expiry week
Not adjusting trades as market moves
Ignoring volatility impact (IV crush)
🛠 Tools to Use
Option Chain (for strike selection)
IV (Implied Volatility) data
Open Interest (OI)
Strategy Builder platforms (e.g. Sensibull, Opstra, or TradingView)
🎯 Final Thoughts
Advanced options trading isn’t gambling — it’s about smart risk management.
These strategies:
Give you control
Limit losses
Provide flexibility across different market types
Before we dive into advanced stuff, here’s a quick refresher.
An Option is a contract that gives you the right (but not the obligation) to buy or sell a stock/index at a certain price, on or before a certain date.
There are 2 types:
Call Option – Right to BUY
Put Option – Right to SELL
Buyers pay a premium. Sellers receive a premium and take on the obligation.
💼 Why Use Advanced Strategies?
If you only buy calls or puts, you might:
Lose 100% of your capital quickly
Get the direction right, but still lose due to time decay
Suffer from high premiums or volatility crush (IV crush)
Advanced strategies help you:
✅ Reduce risk
✅ Lock-in profits
✅ Earn from sideways markets
✅ Trade during high volatility events
✅ Create income strategies
🧠 1. Bull Call Spread – Directional but Risk-Defined
Used when: You’re moderately bullish, but don’t want to spend too much on a call.
How it works:
Buy 1 ATM Call
Sell 1 higher strike OTM Call
Example:
Nifty at 22000
Buy 22000 CE @ ₹100
Sell 22200 CE @ ₹40
Net Cost = ₹60
Max Profit: ₹200 (22200–22000) – ₹60 = ₹140
Max Loss: ₹60 (net premium paid)
👉 This strategy caps your risk and reward but is cost-efficient and smart in range-bound bull moves.
🧠 2. Bear Put Spread – Controlled Downside Betting
Used when: You’re mildly bearish and want to control losses.
How it works:
Buy 1 ATM Put
Sell 1 lower strike Put
Example:
BankNifty at 48500
Buy 48500 PE @ ₹120
Sell 48000 PE @ ₹60
Net Cost = ₹60
Max Profit: ₹500 – ₹60 = ₹440
Max Loss: ₹60
👉 Ideal for limited downside moves — cheaper than naked Put.
🧠 3. Iron Condor – The Sideways Market King
Used when: Market is flat or expected to stay in a range.
How it works:
Sell 1 OTM Call + Buy 1 higher OTM Call
Sell 1 OTM Put + Buy 1 lower OTM Put
You make money if market stays between the 2 sell strikes.
Example:
Nifty is at 22500
Sell 22800 CE, Buy 23000 CE
Sell 22200 PE, Buy 22000 PE
👉 You collect premiums from both sides.
Max Profit = Net Premium
Max Loss = Difference between strikes – Net Premium
👉 Works great in expiry week or low-volatility phases.
🧠 4. Straddle – Big Move Expected, Direction Unknown
Used when: A major move is expected (news, event, earnings), but unsure about direction.
How it works:
Buy ATM Call and ATM Put of the same strike & expiry.
Example:
Stock at ₹500
Buy 500 CE @ ₹20
Buy 500 PE @ ₹25
Total Cost = ₹45
If stock moves big — say ₹60 or more either way — you profit.
👉 High risk due to premium decay if market stays flat.
Need volatility to spike.
🧠 5. Strangle – Cheaper than Straddle, Wider Range
Used when: You expect a big move but want lower cost than a straddle.
How it works:
Buy OTM Call and OTM Put (strikes wider apart than ATM).
Example:
Nifty at 22500
Buy 22800 CE @ ₹12
Buy 22200 PE @ ₹10
Total Cost = ₹22
You profit if the move crosses either strike + premium.
👉 Needs bigger move than straddle but less premium at risk.
🧠 6. Calendar Spread – Play with Time
Used when: You expect price to stay near a level short term, but may move later.
How it works:
Sell near-term option
Buy far-term option (same strike)
Example:
Sell 22500 CE (weekly) @ ₹50
Buy 22500 CE (monthly) @ ₹70
Net Cost = ₹20
👉 You make money if price stays near 22500 by expiry of short leg.
Profits from time decay of the short leg.
🧠 7. Ratio Spreads – Advanced Directional with a Twist
Used when: You expect a move in one direction, but want to reduce cost.
Bull Call Ratio Spread
Buy 1 lower Call
Sell 2 higher Calls
Example:
Buy 22000 CE @ ₹100
Sell 2× 22200 CE @ ₹60 each
Net Credit = ₹20
If market moves moderately up — you profit.
But if it rises too fast — risk increases.
👉 Suitable for experienced traders only — manage risk carefully.
🧠 8. Covered Call – Income Strategy for Investors
Used when: You hold stocks and want to earn extra income.
How it works:
Hold 100 shares of a stock
Sell 1 OTM Call
Example:
You own 100 shares of Reliance @ ₹2500
Sell 2600 CE @ ₹20
If Reliance stays below ₹2600, you keep the premium.
If it rises above ₹2600, your shares get sold, but you still profit.
👉 Perfect for long-term investors.
🧠 9. Protective Put – Insurance for Your Stock
Used when: You own shares but want downside protection.
How it works:
Hold stock
Buy 1 ATM/OTM Put
Example:
Own Infosys @ ₹1500
Buy 1480 PE @ ₹20
If stock falls below ₹1480, your loss is capped.
👉 It’s like buying insurance for your portfolio.
🧠 10. Butterfly Spread – Range-Bound Precision Strategy
Used when: You expect minimal movement and want low-risk, high-RR trade.
How it works (Call Butterfly):
Buy 1 lower strike Call
Sell 2 middle strike Calls
Buy 1 higher strike Call
Example:
Buy 22000 CE
Sell 2× 22200 CE
Buy 22400 CE
You earn if market expires at the middle strike.
Max loss = Net debit
Max profit = At middle strike
👉 Best for expiry day premium decay strategies.
Common Mistakes to Avoid
Not understanding strategy risk
Using high-margin strategies without protection
Overtrading in expiry week
Not adjusting trades as market moves
Ignoring volatility impact (IV crush)
🛠 Tools to Use
Option Chain (for strike selection)
IV (Implied Volatility) data
Open Interest (OI)
Strategy Builder platforms (e.g. Sensibull, Opstra, or TradingView)
🎯 Final Thoughts
Advanced options trading isn’t gambling — it’s about smart risk management.
These strategies:
Give you control
Limit losses
Provide flexibility across different market types
Hello Guys ..
WhatsApp link- wa.link/d997q0
Email - techncialexpress@gmail.com ...
Script Coder/Trader//Investor from India. Drop a comment or DM if you have any questions! Let’s grow together!
WhatsApp link- wa.link/d997q0
Email - techncialexpress@gmail.com ...
Script Coder/Trader//Investor from India. Drop a comment or DM if you have any questions! Let’s grow together!
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Hello Guys ..
WhatsApp link- wa.link/d997q0
Email - techncialexpress@gmail.com ...
Script Coder/Trader//Investor from India. Drop a comment or DM if you have any questions! Let’s grow together!
WhatsApp link- wa.link/d997q0
Email - techncialexpress@gmail.com ...
Script Coder/Trader//Investor from India. Drop a comment or DM if you have any questions! Let’s grow together!
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.