Ready-made options strategies are categorized into two: Low-risk and High-risk strategies.

Low-Risk Strategies:

• Potential Loss:

The risks involved in low-risk strategies are limited and defined.

• Potential Profit:

Since the risk is limited, the potential for earning profit is also limited. The profit earned cannot exceed a certain amount.

• Method:

The low-risk strategies limit both upside and downside by using combinations of options to hedge risks.

• Suitable for Risk-averse traders:

Low-risk strategies are suitable for traders with low risk appetite who wish to generate a steady income.

Examples of ready-made strategies:

• Bull Call Spread:

In a bull call spread, a trader buys a call option and sells a call option with a higher strike price. This reduces the risk involved in options strategies.

• Covered Call:

In a covered call, traders sell a call option on an asset that they already own. The premium on this option acts as an income.

• Protective Put:

In a protective put, the trader buys a put option for the asset they already own. This limits potential losses if the stock price falls.

• Iron Condor:

In this strategy, four options contracts generate profit when the price of the underlying assets moves in a defined range.

High-Risk Strategies:

• Potential Loss:

The potential loss is very high, especially in naked strategies where the trader doesn't own the underlying assets.

• Potential Profit:

Since the risk is unlimited, the potential for profits is also unlimited.

• Method:

In high-risk strategies, you sell naked options or buy single options to speculate on price movement.

Example of High-Risk Strategies:

• Long call or Put:

In this strategy, the potential loss is limited while the potential profit is unlimited if the stock moves in the desired direction.

• Naked Call:

In a naked call, you sell a call option without owning the underlying asset. The potential limit for loss is unlimited.

• Short Straddle:

In this strategy, the trader sells both call and put options with the same strike price. Here, loss is unlimited if the stock makes a significant movement.