Options trading strategies are trading methods constructed by different followers to achieve trading profits, to regulate their market exposure and to better utilize opportunities. There are now a number of types of options strategies available; some of them are widely followed and others are by some specific traders.

Based on the construction, options trading strategies can be simple strategies and complex strategies. Simple strategies, as the name suggest, are simple and involves one or two trades/contracts ; and complex strategies may include many of the same.

Based on their nature, options trading strategies can be grouped in to 3 main categories as,
  1. Bullish Strategies: These strategies are utilized when the trader expects the underlying product price to go upward. The examples include long call options, short put options, bull spread and synthetic long stock, etc.
  2. Bearish Strategies: These are utilized when the underlying produce price is expected to drop downward. The examples include long put options, short call options, bear spread, etc.
  3. Market Neutral strategies: These are utilized depending on the price volatility of underlying product; and are usually not dependent on price ups and downs. They are also known as non-directional strategies. Examples include butterfly options, straddle and strangle strategies.

The neutral strategies have two sub-divisions as bullish-on-volatility strategies and bearish-on-volatility strategies. There are also two additional options strategy categories available as event-driven strategies and stock-combination strategies.

There are no single best options trading strategy for everyone. When selecting a strategy, one should consider his trading experiences, online trading system, options trading broker features, money management, portfolio size, market volatility and trend.