Options Trading Strategies or Hybrid Systems / Strategies Where the Product is a System But Can Be Used as a Strategy
They are differences in options strategies. Most people think of options strategies as options combination strategies such as covered calls, iron condors, credit spreads, butterflies etc. And indeed they are options strategies.
But then there are options trading strategies. We define options trading strategies as price-based trading strategies where we enter and exit optoins positions based on events on a price chart.
Most of the time we simply buy calls or buy puts as opposed to an options combination strategy since the most money can be made by buying calls and buying puts in coordination with the price charts.
A lot of people like to pitch options combination strategies as if they were some sort of magic formula to success in options trading. Well, they are not. Options combination strategies do not make you money on their own, trading price action off price charts can make you money consistently over time.
That said, we can use option combination strategies with our price chart based options trading strategies as a method for profiting more consistently over time such as using a covered calls with a price based strategy or by using a covered calls trading system. Also we have strategies and systems for: credit spreads, debit spreads and strangles.
Now what exactly is a strategy? Strategy is a set of rules for an optimized event on a price chart. So therefore when you see the particular strategy setup based on the strategy rules on the price chart then you have a higher probability opportunity to trade. If you like the trade you can take it. You can combine a strategy with other factors to enhance the probability and potential size of success.
What's a strategy versus a trading system? A trading system uses a strategy, or a couple, few strategies in combination over and over without thinking or guessing in hopes of netting out of profit. With systems trading, you can reduce your effort and thinking considerably moving thought effort to the cerebral mind and subconscious mind making trading much less time involved and more efficient.
Strategy trading usually takes a lot of focus and energy, patience and monitoring. And still you have to be systematic in your strategy trading so you take trades over and over and don't just stop. Because if you stop, then so does your income.
Options Trading Strategies - Price Based Trading Strategies
Some of these options trading strategies are placed on are other sites related to the Options Trading AUTHORITY brand as you'll see below just so you understand. Click on a logo to access more information.