Hi Sean, Interesting article, you’ve made me curious. I’m fairly new to trading in general, it would be great if you could help me clarify what you’ve discussed.
Given that both put and call options only gain value when the strike price is on ‘right’ side of the underlying asset price. It would hence seem logical to me that it is necessary to have a portfolio roughly equally weight between put and call options to obtain the ‘spreads’ described in your article. Essentially what you are describing is a long short equity strategy, but with options instead? Is this a correct interpretation?
Really enjoyed this article.