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Introduction to common types of option portfolios

1. Bull call spread

Purchase call options at a specific strike price while also sell the same number of calls of the same asset and expiration date but at a higher strike.


2. Bull put spread

Purchase one put option while simultaneously sell another put option with a higher strike price.


3. Bear call spread

Sell call options at a specific strike price while also buy the same number of calls, but at a higher strike price.


4. Bear put spread

Purchase put options at a specific strike price while also sell the same number of puts at a lower strike price.


5. Butterfly spread

Purchase a call/put option at lower strike price and buy one call/put option with a higher price, writing two at-the-money call/put options, all with the exact same maturity.


6. Condor spread

Buy a call/put with strike price A (the lowest strike); sell a call/put with strike price B (the second lowest); sell/put a call with strike price C (the second highest); buy a call/put with strike price D (the highest strike), all with identical expiration dates.


7. Iron condor spread

Consist of two puts (one long and one short) and two calls (one long and one short), and four strike prices, all with the same expiration date.


8. Strap

Being long in one put and two call options, all with the exact same strike price, maturity and underlying asset. Also referred to as a "triple option".


9. Strip

Being long in one call and two put options, all with the exact same strike price and maturity.


10. Straddle

Hold a position in both a call and put with the same strike price and expiration date.


11. Strangle

Buy or sell a call option and a put option with different strike prices, but the same expiration date.


12. Calendar spread

Buy a longer-term contract and go short a nearer-term option with the same strike price and the same underlying asset.

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