Short v. Long Volatility on Options So many different types of option strategies One useful distinction: are we long or short volatility? In other words: does a large movement in the asset price help or hurt us?
Long Volatility Buying Calls Buying Puts Protective Puts Buying straddles
Long Volatility Buying Calls
Long Volatility Buying Puts
Long Volatility Protective Put
Long Volatility Buying Straddles
Short Volatility “Income” strategies: Covered Calls Selling Puts Selling straddles Some spread trades
Short Volatility Covered Call
Short Volatility Selling Puts
Short Volatility Selling straddles
Short Volatility Deep In/Out-the-Money spread trades
Long or short volatility?