Option Strategy - Strangle

[@sufij]

your teaching style is excellent! thanks a lot for your help, makes it much more simpler than how my prof explained it

[@nomodnolife]

Sir, this is awesome. Very well explained, this and the other video... Appreciate that!

[@jamesjk1234]

I get the numbers. That makes sense. But I have a question on understanding the process of the option strategy. Do you have a video explaining the process? If not, could you make one?

[@RonaldMoy]

I'm not sure what you mean by the process?

[@saganawski]

Ronald thanks for making these videos. If the price moves pass 85, when would you throw away the put? Vice versa

[@RonaldMoy]

Kenny James Yes

[@jotyislam8938]

Thanks for your super explanation ❤

[@alexma6956]

great teaching skills and explanation, thanks a lot for this video.

[@niketankotadiya9542]

sir can you explain why we buy ATM options in some strategy, ITM in other strategy and OTM ? which option to select for strategy? for eg we use ITM AND OTM in bull call spread? then why ATM for straddle?

[@RonaldMoy]

For the straddle, we usually choose at the money options because we expect the stock price to make a large move but we don't know whether it will go up or down so it makes sense to pick options that are close to the current stock price. In the strangle, we pick a put with a lower exercise price and a call with a higher exercise price because they are less expensive. Most likely, both will be out of the money because you don't know whether the stock will rise or fall so you probably want the stock price to be in between the two prices. For the bull spread, we need to buy a call and sell a call with a higher exercise price (call bull spread). Clearly, they can't both be "at the money." They could both be in the money, both could be out of the money, one could be at the money and the other out of the money.

[@niketankotadiya9542]

Ok

[@niketankotadiya9542]

Why do we sell or buy more number of options in case of strip and strap?

[@niketankotadiya9542]

Which options should be selected for? otm itm or atm?

[@RonaldMoy]

You buy more puts if you think the price is more likely to fall and more calls if you think it is more likely to rise.