Also known as time or horizontal spreads, calendar spreads involve options with different expiration months. The term horizontal comes from the fact that option months were originally listed on the board at the exchange from left to right, with strike prices listed from top to bottom. Because of this, options with different strike prices but the same expiration are frequently referred to as vertical spreads.
Protective puts are a simple and relatively inexpensive means for investors to position themselves for any possible change in directions in today’s highly volatile market.
Put back spreads are wonderful strategies for when an investor is expecting big downward moves in already volatile stocks. The trade itself involves selling a put at a higher strike and buying a greater number of puts at a lower strike price.
Originally developed by John Bollinger, Bollinger Bands are volatility bands drawn around a simple moving average. They are calculated by utilizing the standard deviation of price over the same period as the moving average and plotted as lines above and below the moving average.
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