Prebuilt Strategies

Prebuilt Strategy Template

AlgoTest Strategy Builder offers you some prebuilt strategy templates that you can use.

Straddle

This strategy involves buying or selling options contracts with the same strike price and expiration date of the underlying asset.

In a long straddle, a trader buys both a call and a put option. This strategy is used when the trader expects a significant price movement in either direction.

On the other hand, in a short straddle, a trader sells both a call and a put option. This strategy is implemented when the trader expects the market to remain within a narrow range and not move significantly in either direction.

Strangle

This strategy involves buying or selling options contracts with different strike prices but the same expiration date of the underlying.
In a long strangle, a trader buys a call and a put option. A trader implements a long strangle strategy when they expect a large price movement in either direction.
In a short strangle, a trader sells a call and a put option. A trader implements a short strangle strategy when they expect the market to be within the range of the strikes they sell.

Bull Call Spread

A bull call spread is a trading strategy that entails purchasing a call option with a lower strike price and at the same time selling a call option with a higher strike price, both with the same expiration date.
Typically, this involves buying an at-the-money (ATM) call option and selling an out-of-the-money (OTM) call option. The difference in strike prices depends on the level of aggressiveness you want for the trade. This strategy is suitable when you have a moderately bullish outlook on the underlying asset.

Bear Put Spread

A bear put spread is a trading strategy that entails purchasing a put option with a higher strike price and at the same time selling a put option with a lower strike price, both with the same expiration date.
Typically, this involves buying an At-The-Money (ATM) Put Option and selling an Out-of-The-Money (OTM) Put Option. The difference in strike prices depends on how aggressive you want the trade to be. This strategy is suitable when you have a moderate bearish outlook on the financial instrument.

Iron Fly

The Iron Fly strategy is a multi-leg options strategy that includes selling at-the-money (ATM) call and put options while simultaneously buying out-of-the-money (OTM) call and put options with the same expiration date.
This strategy is suitable when you expect the underlying asset to remain within a narrow price range. Traders realize the maximum profit when the market stays near the ATM strike sold by the traders.

Iron Condor

The Iron Condor is a multi-leg options strategy that includes selling out-of-the-money (OTM) call and put options while also buying even further OTM call and put options with the same expiration date.
This strategy aims to be delta-neutral, meaning that traders can potentially profit more when the market remains stable and doesn't move significantly in either direction. The maximum profit is achieved when the market stays within the range of the sold call and put strike prices.