Advanced Option Trading Strategies: Bull Put Ladder Strategy

Bull Put Ladder:
A bull put ladder is simply a bull put spread with the additional purchase of put at a lower strike price. The trader is long two puts and short a put option. The maximum risk is capped, but the maximum upside is unlimited. This might be considered a bearish strategy, but it is more accurately an advanced option strategy for income.

Below is the risk profile for a bull put ladder option strategy:

Advanced Option Trading Strategies: Bear Call Spread

Bear Call Strategy:
A bear call spread is an option trading strategy that is profitable for stocks that are either falling or rangebound. In an bear call spread, the trader protects a naked call position by buying a higher strike call option. Both the lower strike call that is sold, and the purchase of the higher strike call should be out of the money (OTM) to insure profits on rangebound stocks. This strategy works because the trader gets a net credit buy selling a more expensive call option and purchasing a cheaper call option (further OTM). Because both calls are OTM, if the stock falls or remains under the strike price of the short call position, both options expire worthless and the trader pockets the net credit (the difference in strike prices).

Below is the risk profile for a bear call spread:

Advanced Option Trading Strategies: Bear Call Ladder Strategy

Bear Call Ladder Strategy:
A bear call ladder strategy is is a bear call spread with the additional purchase of a long call position further out of the money (OTM). Sometimes a bear call ladder is implemented when a call spread goes against the trade and the position is adjusted to become bullish.

Below is the risk profile for a bear call ladder option strategy: