Trading Rising Implied Volatility
15 strategies
Buying a put at a given strike and selling a put at a lower strike. Strategy that profits from rising implied volatility before an anticipated bearish movement. Initial debit is offset by potential gain.
Buying a call at a given strike and selling a call at a higher strike. Benefits from rising implied volatility in a bullish environment. Reduced cost compared to simply buying a call.
Holding shares while selling calls. Profits from increasing implied volatility which raises collected premiums. Ideal when volatility rises without strong directional movement.
Simple call option purchase. Directly benefits from rising implied volatility which increases option value. Bullish directional position with maximum leverage.
Selling a short-term call and buying a long-term call at the same strike. Profits from rising implied volatility which impacts the longer-dated option more significantly, creating a favorable spread.
Complex four-legged position that benefits from increasing implied volatility. Combines spreads to profit from anticipated widening of price range with rising volatility.
Buying an ATM straddle and selling a protective strangle. Massively profits from rising implied volatility through the long straddle which appreciates with increasing volatility.
Simple put option purchase. Benefits from rising implied volatility which increases its value. Bearish directional position with protection and optimal leverage.
Selling a short-term put and buying a long-term put at the same strike. Rising implied volatility favors the longer-dated option, creating a profitable value spread.
Buying multiple calls at one strike and selling calls at a higher strike. Asymmetric structure that profits from rising implied volatility on long options before a bullish move.
Buying multiple puts at one strike and selling puts at a lower strike. Benefits from increasing implied volatility on long puts before anticipated bearish movement.
Simultaneous purchase of a call and put at the same ATM strike. Pure volatility strategy that massively profits from rising implied volatility and significant directional movement.
Buying an OTM call and put at different strikes. Less expensive than straddle, profits from rising implied volatility and requires more significant directional movement.
Buying a put on held shares. Rising implied volatility increases the value of protection. Portfolio insurance that appreciates when market uncertainty increases.
Short stock position combined with call purchase. Replicates a long put and benefits from rising implied volatility through the purchased call. Synthetic alternative to direct put.