Are all option strategies based off of just a few?

Y

youngtrader

Im sure its a dumb question but I have been searching around for a while now trying to find every single option spread out there that people trade and I have come to the conclusion that in reality there is only just a handful of actual option strategies and a million different variations of those strategies.........does this seem correct?

I mean it seems like you have the following base strategies: call and put spreads (verticals), butterflies, straddles, strangles, ratio spreads, back spreads, calenders and everything else is just a derivative of those base strategies.

Thoughts? Or am I wrong?
 
You can either buy or sell a call or buy or sell a put. Between those 4 separate possible actions and the myriad combinations of those actions in different numbers. ratios, months and strikes you get unlimited strategies so to speak. Just like only 8 notes of music but unlimited music.
 
Quote from optioncoach:

You can either buy or sell a call or buy or sell a put. Between those 4 separate possible actions and the myriad combinations of those actions in different numbers. ratios, months and strikes you get unlimited strategies so to speak. Just like only 8 notes of music but unlimited music.
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optioncoach

Very good answer, however what if we are talking about options in just 1 month? Then isn't basically every strategy based on the above base strategies?

Thanks
 
Sounds like the training materials on cboe.com would be of interest to you. It is all free and will give you a good foundation on how various option strategies work.
 
You are all wrong… :) There is only two variable: future price and volty…the rest is secondary. In simple sport betting terms , if one can establish a 55/45 record , he will be a winner in both straight and parley bets
 
Actually there really is no difference between calls and puts you're either long options or short options and the associated risks.

Quote from Roy Neff...

"a call is a put and a put is a call"
 
Quote from youngtrader:

Im sure its a dumb question but I have been searching around for a while now trying to find every single option spread out there that people trade and I have come to the conclusion that in reality there is only just a handful of actual option strategies and a million different variations of those strategies.........does this seem correct?

I mean it seems like you have the following base strategies: call and put spreads (verticals), butterflies, straddles, strangles, ratio spreads, back spreads, calenders and everything else is just a derivative of those base strategies.

Thoughts? Or am I wrong?
More...
Absolutely ALL strategies are combinations of:

Long call
Short call
Long put
Short put
Long stock (or future)
Short stock (or future)
 
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