In the previous module, we
introduced you to several trades
designed to be of use in either up or down markets.
In this module, we'll explore
a couple of strategies that may be used
by option traders to take
advantage of a low in the markets.
By low, I'm referring to a period
of relatively small movements in the price
of an underlying asset where
volatility is expected to diminish.
Once again, we'll walk you through examples of
how each strategy works and then show you
a practical application of how such trades may be
created using IBKR's Trader Workstation.
While we're talking specifically about
strategies designed for neutral markets,
don't forget that the opposite side of each
trade infers higher volatility,
which would appeal to option traders looking for
larger price movements or
upward shifts in volatility. Let's begin.