Options Strategy 1- Bull Call Spread
Hello friends. Today I am going to share my first strategy. As I promised I’m going to deliver my first strategy so that you people should not be telling me all the time, you just tell me, tell us adjustments and all and you never tell us the strategy. So, here are friends my first strategy and this is the most appropriate or you can say most uh valid strategy in today's market scenario. Whatever is going to happen in the market if you think about the market, this is the most or you can see the best possible strategy which you can apply in the current market scenario. So, friends, let's start and understand this best option strategy in the current market scenario, and the name of the strategy is bull call spread. So, let's understand about it.
Let's first understand about the strategy but before that first of all congratulations to all those people who have gone through all the basic and advanced level of courses, friends that are very important and if you have not gone through, I will request recommend you to go through all those articles because yes those are boring article but those are building blocks on which you can build your knowledge about future and option and this knowledge only going to make money for you in the long term.
The first strategy is the best strategy in a current market scenario when the market is running like a bull every day and nifty is climbing new heights every day. This can be a golden type of option strategy which you can deploy. So, let's learn about it. So, friends, the first thing is skill level. What is the skill level required like how much you should know about before going into this strategy? So, this strategy is not for the beginner, of course. It is not also for experts. You should have a skill level of beginner to a medium that means you should have at least your basic clear at least your little bit of advanced knowledge clear and then you should go. That's why I always say go to basic and go to advance and you will have enough knowledge to start and implement this strategy. Second, what is the category of spreads? Now, you might be thinking about what is the category?
So, friends, there are different categories of options strategies like spreads, or their, ah strangles, or iron contours are there okay. These are all categories; these are not strategies themselves. They are a category in the category. There is a subcategory also. For example, in spread there are bull cards called spread there are bear calls spread and there are all other kinds of spreads. So, there are lots of kinds of spreads and this is a whole category so this strategy belongs to the spread category. Now why it is important to tell you about the category of this options strategy because once you know the category you quickly will understand what is the basic characteristics of this particular category and for spread category, these are two leg strategies and these are directional strategies so like there has to be a direct view before you go for any kind of spread implementation right. The third important part is what kind of like you are going to buy the options or sell the options.
So, you are going to buy the option that is your main motive but to reduce your cost you are going to cover it also. It is not covered. So, you are going to sell one option also okay in the same direction. So, you are going to buy one call and you are going to sell one call above you can say at higher strike prices that I will explain don't worry about it. Now, our famous four-step model. So, what is the four-step model? The first step we have to know about the market view. So, what should the market view and which should be the market view? Should be bullish I don't know and these bearish variances for the next strategy which is a bearish call spread or buy put spread. So, here the market view should be bullish but with the range limit. So, you have a view on the market after reading all the indicator the market is going to go upmarket is bullish but it is bullish only up to a certain range after that it will not be bullish because there will be a lot of uh you can say resistance, lot of fighting from the uh short-sellers okay. So that's why your view is very clear.
We have to make a market view because this is a directional strategy okay so next is a strategy itself. So, the name of this strategy and it's also called bull call spread, it's also called long call spread or vertical call spread all is the same. In general, scenario if the market is going against your views very sharply very quickly, no adjustment but you see if you feel the market is the volatile market is going to reverse then you can use nightingales and you can use rollover adjustment what are these adjustments, I already tell you one small rectification. So that is how this strategy is going to help you in your risk. I hope you liked the article.