We shall start by understanding the Bullish option trade first to get a clear idea of Non-bullish
Options strategies. When an Option Trader realizes that there will be an increase in the price of the underlying asset, also known as the strike price, which eventually results in profit or gain, is called a bullish option strategy. Now, let's say the assumptions of the strike price did not perform as expected; they may suffer a loss.
Now, imagine a scenario opposite to this, when the market or stock is moving at a slower pace or not moving at an expected rate, then it is called a Non-bullish outlook. It may be possible that the whole market or a particular stock might face this type of situation.
When this type of situation occurs, there are a few strategies an Option Trader can apply to protect themselves from the loss. They are Bear-call Spread, Put Calendar and Put Butterfly. We shall see what those strategies are to avoid the loss and make a smart move in adverse conditions.
The bear call spread: The bear-call spread options strategy can be proved as the best for a Non-bullish market; just as the bull put strategy is best for a non-bearish market. When the short put strike price is anticipated to be steady or have no changes, at that time, if the Options Trader sells out of the money vertical call spread, he can make a profit in 3 different situations out of four.
These three situations can profit if the underlying moves lower, if it moves sideways, and if it moves slightly higher. In all the above three conditions, there are chances that an investor can make a profit.
Put Calendar: Another way to profit from a Non-bullish outlook is by buying a slightly bearish Put Calendar. If the underlying asset's price rises, a long Calendar provides an options trader an opportunity to equalize the negative delta with positive theta. But the risk is associated if the market or equities drops too much.
The option trader generally receives tighter (very close) bids using puts instead of calls, especially when they select the strike price below the current market price of an underlying asset for a calendar. Out of the money have tighter spreads and are not so expensive.
Put Butterfly: Similar to the long calendar, the put butterfly strategy can also help an investor to make money in a Non-bullish situation. Depending upon the structure where the break-even points are placed, the butterfly body (short puts) may be at a negative area from the current trading price or at a support level.
Various other positions can help traders make money. If the strike price of the underlying asset moves high or low, it might not give any advantage, just like a long Calendar.
Options Traders, those involved in bullish trading strategy, have a belief system that underlying prices often security will increase. Those dealing in a bearish scenario believe that the underlying asset price will go down and eventually affect the overall wealth.
Moreover, sometimes it does not matter how the market is changing, bearish, Non-bearish, or bullish. It all depends on the investor's sentiments and mood, thinking capability, and far sight.
If you do not want to take any risk or feel confused even a bit, I must advise you to take guidance from the best financial advisor; it is not very difficult to find one in your city.
Having a qualified and certified financial advisor will help you make the right decision in any move and ensure you don't lose your wealth. Another method is to use various free online calculators to check upon Non-bearish and bearish and many other trading strategies.
Well, if you do not get carried away by your emotions and think logically or maybe take some advice, you can surely make some profit even if there is no change in the strike price of the underlying assets, as seen in the above three conditions.