Comprehensively explain different options strategies

Question

Accepted Answer

Options strategies are techniques used by traders to maximize profits and minimize risks.

Call option: buying the right to buy a stock at a certain price
Put option: buying the right to sell a stock at a certain price
Straddle: buying both a call and put option at the same strike price
Strangle: buying both a call and put option at different strike prices
Butterfly: buying two call options and two put options at three different strike prices
Iron condor: selling both a call and put option at different strike prices
Covered call: selling a call option on a stock you already own
Protective put: buying a put option on a stock you already own
Collar: buying a protective put and selling a covered call on the same stock

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