Christmas tree---

Christmas celebrations are long gone and you may be thinking what do I have in store for it now.Well, I am talking of an options trading strategy that is generally achieved by purchasing one call option and selling two other call options at different strike prices,which is termed as Christmas Tree in the world of finance. And the reason behind the term is when drawn structurally, the strike price of the long option is located below the two successively higher written calls and loosely resembles a Christmas tree.

Investopedia explains Christmas Tree...
This strategy is used when an investor believes the stock is going to make a move higher. It is a variation of the ratio spread, so a significant upward move in the stock price will result in a very large loss due to the extra short call. The staggered strike prices for the written calls in the Christmas tree strategy reduce the amount of loss incurred when the share price rises more than expected, unlike the ratio spread, where the call options have the same strike.

Filter rule-- A trading strategy !!

Filter rule is one of the trading strategies that benefit traders from the price movements of the stocks and fall under serial correlation strategy. A technical trading rule in which an investor buys and sells stocks if their price movement reverses direction by a minimally acceptable percentage.

Filter rules are created from analyzing the historical price trends of a security. The assumptions that is followed in this trading is that price changes are serially correlated and emerges from price momentum theory, i.e., stocks which have gone up strongly in the past are more likely to keep going up than go down.

So in conclusion, this strategy may work provided each time your bets are good. However, a good and justified way of making money from this strategy is through efficient money management. Remember, if you want to follow this strategy be prepared to get wiped off completely, and be ready with large amout of money. Evidence has suggested that filter rules are rarely successful in creating profits for the investor.