Setups are a specific combination of options contracts that matches a strategic objective. Setups are sometimes referred to as spreads or "strategies" (not to be confused with a Brutus Options Ranking strategy).
A bear call spread is where a call is sold close to the current underlying price and the risk is fixed by purchasing another call with a higher strike price. A bear put spread is where a put is purchased close to the current underlying price and lower strike put is purchased to reduce the trade cost. [click to read more]
A bear trap encourages bearish traders to place shorts on stock options since they expect the underlying prices to go down. But this doesn't happen. Instead, it either stays the same or starts increasing.
A strategy of combining bull and bear credit spreads to minimize the risk with the short option of each spread on a single strike price. The profit is also limited due to the increased probability of the trade to profit. Put's or calls can be used for this strategy.[click to read more]
Strategies are the foundation for Brutus to perform a rank. A strategy consists of defining a combo of Market Group Option Setup (spread) to be Scan, as well as any stock or options criteria that is important to your trading requirements.