Neutral Options trading strategies

Neutral options trading strategy will have greater gain in
the a stable markets. Investments using this strategy is not
suitable for a volatile market.

Below are the list of neutral option strategies:

REVERSAL
Primarily used by professional traders, a reversal is an
arbitrage strategy that allows traders to profit when options
are underpriced. To put on a reversal, a trader would sell stock
and use options to buy an equivalent position that offsets
the short stock.

CONVERSION
Primarily used by professional traders, a conversion is an
arbitrage strategy that allows traders to profit when options
are overpriced. To put on a conversion, a trader would buy stock
and use options to sell an equivalent position that offsets the
long stock.

THE COLLAR
For bullish investors who want to nice low risk, limited return
strategy to use in conjunction with a long stock position, collars
are a great alternative. In this case, the collar is created by
combining covered calls protective puts.

LONG STRADDLE
For aggressive investors who expect short-term volatility yet have
no bias up or down (i.e., a neutral bias), the long straddle is
an excellent strategy. This position involves buying both a
put and a call with the same strike price, expiration, and
underlying. The potential loss is limited to the initial investment.
The potential profit is unlimited as the stock moves up or down.

SHORT STRADDLE
For aggressive investors who don't expect much short-term
volatility, the short straddle can be a risky, but profitable
strategy. This strategy involves selling a put and a call with
the same strike price, expiration, and underlying. In this
case, the profit is limited to the initial credit received by
selling options. The potential loss is unlimited as the market
moves up or down.

LONG STRANGLE
For aggressive investors who expect short-term volatility yet have
no bias up or down (i.e., a neutral bias), the long strangle is
another excellent strategy. This strategy typically involves
buying out-of-the-money calls and puts with the same strike
price, expiration, and underlying. The potential loss is limited
to the initial investment while the potential profit is unlimited as
the market moves up or down.

SHORT STRANGLE
For aggressive investors who don't expect much short-term
volatility, the short strangle can be a risky, but profitable
strategy. This strategy typically involves selling
out-of-the-money puts and calls with the same strike price,
expiration, and underlying. The profit is limited to the credit
received by selling options. The potential loss is unlimited
as the market moves up or down.

THE BUTTERFLY
Ideal for investors who prefer limited risk, limited reward
strategies. When investors expect stable prices, they can
buy the butterfly by selling two options at the middle strike
and buying one option at the higher and lower strikes.
The options, which must be all calls or all puts, must also
have the same expiration and underlying.

RATIO SPREAD
For aggressive investors who don't expect much short-term
volatility, ratio spreads are a limited reward, unlimited risk
strategy. Put ratio spreads, which involve buying puts at
a higher strike and selling a greater number of puts at a
lower strike, are neutral in the sense that they are hurt by
market movement.

CONDOR
Ideal for investors who prefer limited risk, limited reward
strategies. The condor takes the body of the butterfly -
two options at the middle strike - and splits between two
middle strikes. In this sense, the condor is basically a
butterfly stretched over four strike prices instead of three.

CALENDAR SPREAD
Calendar spreads are also known as time or horizontal spreads
because they involve options with different expiration months.
Because they are not exceptionally profitable on their own,
calendar spreads are often used by traders who maintain large
positions. Typically, a long calendar spread involves buying an
option with a long-term expiration and selling an option with
the same strike price and a short-term expiration.