Investment strategies

There are many strategies that you can adopt using options - depending on whether you think the underlying assets are likely to rise, fall or remain steady. This section outlines some of the most frequently used. They are provided for educational purposes only and do not constitute financial product advice.

Bullish strategies

Do better in a rising market. They usually involve buying call options and selling put options to benefit from increasing asset prices.

Bearish strategies

Work best in falling markets. Bearish strategies generally rely on buying put options to lock in selling prices as asset prices decrease.

Neutral strategies

Work best in stagnant markets. They often involve balancing the purchase and sale of both call and put options to take advantage of any changes in underlying asset prices.

Bullish strategies

LONG CALL

Where the investor expects the price of the underlying stock to rise.

Ratio call spread

For the investor who expects a slight market rise but sees the potential for a sell-off.

Bull spread

Where the investor expects the share price to rise moderately.

Stock repair

May enable the investor to breakeven without the stock recovering to the purchase price.

Protected cover write or collar

Can be used to generate income when share prices are expected to rise moderately.

Protected put

The purchase of put options to fully protect shares.

Bearish strategies

Long put

Where the investor expects the price of the underlying stock to fall, the bought put provides leveraged exposure to the price fall.

Bear spread

The bear spread can be considered when the investor expects a moderate fall in the market but is not prepared to pay to take a put outright.

Neutral strategies

Covered write

Can be used to generate income when share prices are expected to remain flat.

Short put

Can provide the investor with extra income in flat to rising markets or enable them to buy stock at lower overall cost.

Short strangle

When option premiums are overpriced, and underlying shares are expected to stay within a fairly narrow price range.

Long butterfly

Can be used to generate extra income when the investor believes the market is stagnating.

Calendar spread

Provides a method for the trader to earn income in a neutral market by profiting from time decay.

Strategies for price breakouts

Long straddle

Where the investor expects a sharp movement in the share price, but is unsure of the direction it will take.

Long strangle

When implied volatility is relatively low, but the investor expects the stock price to make an explosive move.

Make smart investment decisions

Understanding options trading

This booklet explains options, how they work and what they can be used for.

PDF - 2MB

ASX option poster

The options strategy spectrum, when and how to use.

PDF - 56KB

26 proven option strategies

A booklet detailing strategies for all market conditions.

PDF - 1MB

Options for SMSF investors

Protection for your portfolio from large market corrections.

PDF - 198KB

Advanced charting tool

Analysis tools

Apply your 'Technical Analysis' via the advanced charting tool. You can create your own charts with 8 different chart types, technical indicator overlays, update chart intervals, add dividend events, or run company code price comparisons.

ASX online courses

Both courses have 10 modules with each module taking 20-25 minutes to complete

Introduction to Options

Options are flexible tools that appeal to active investors. Take this course to learn how to magnify profits or protect your portfolio by buying or selling options.

Advancing in Options

This course will extend your knowledge of options trading beyond the introductory course. Learn about multi-legged strategies, margins and option pricing in detail.