Derivative Strategies

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Lyrics

[Verse 1]
When you own the stock but fear a fall
Write a covered call above it all
Collect premium while you wait and see
Cap your upside but earn money free
If prices drop, that put you bought before
Will cushion losses at your chosen floor

[Chorus]
Bulls spread up, bears spread down
Butterflies flap all around
Straddle wide when volatility's high
Strangle tight when moves amplify
Calendar time, collar design
Hedge your risk or boost your shine

[Verse 2]
Bull call spreads when you're feeling bright
Buy low strikes, sell the higher flights
Bear put spreads when storm clouds gather
Buy high puts, sell low - prices scatter
Butterfly wings with three strikes aligned
One long middle keeps risk confined

[Chorus]
Bulls spread up, bears spread down
Butterflies flap all around
Straddle wide when volatility's high
Strangle tight when moves amplify
Calendar time, collar design
Hedge your risk or boost your shine

[Bridge]
Straddle same strike, call and put together
Strangle different strikes, profits in rough weather
Calendar spreads across different months
Collar protection with premium hunts
Buy the put, sell the call above
Insurance policy with income you love

[Verse 3]
Iron condors soar with four wings spread
Credit received while risks stay fed
Protective puts guard portfolio wealth
While covered calls boost income stealth
Mix and match these tools with care
Each strategy fits a different prayer

[Chorus]
Bulls spread up, bears spread down
Butterflies flap all around
Straddle wide when volatility's high
Strangle tight when moves amplify
Calendar time, collar design
Hedge your risk or boost your shine

[Outro]
From simple calls to complex chains
Each derivative serves different gains
Master these moves, understand the game
Options strategies stake your claim

← Implied Volatility and Volatility Patterns | Options Basics for Derivatives →