5 Strategies for Advanced Options Trading

James Royal, Ph.D.
By James Royal, Ph.D.  
Edited by Chris Hutchison  
advanced options trading

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Strategies for options trading range from the simple to the complex — from basic one-legged trades to the four-legged monsters — but all strategies are based on just two basic option types: calls and puts. Each has its own upsides and downsides, and you might want to refresh your understanding of what a call option is and what a put option is.

Below are five advanced strategies that build from these basics, using two options in the trade, or what investors call “two-legged” trades. Usually, a brokerage can set up these trades as part of one transaction, so investors don’t have to enter each leg separately.

The strategies