One-time purchase of PCI and CALL options
The meaning of such a popular strategy lies in the fact that the trader, often already during trading, realizing that the probability of executing the forecast for some options is very small, so as not to lose capital, acquires an option opposite to the first. So, this trading system allows you to minimize possible losses, acts as a strategy for managing risk management in options.
What is hedging?
The concept of hedging means insuring financial risks by taking the opposite position on an asset in the market.
For example, a company produces oil and does not know how much its products will cost in three months. She has an assumption that the price of oil will decrease. To insure its profits, the company can open the opposite position, that is, sell the corresponding number of oil contracts on the exchange.
If the price of oil falls, the company will act in one of two ways:
- put its products on the stock exchange at a predetermined price, which will be higher than the current market price;
- The derivative securities position will be closed at the time of the sale of real oil. Then the company will sell real oil cheaper than planned, but the difference will be compensated by the profit from operations with derivative securities.
An example of strategy work
For example, here are the following calculations: you invest 1 thousand dollars in an option to sell with a deadline set before the end of the day. However, after some time, you find that the situation in the market does not promise you anything good. Then you can buy an option to buy at a reasonable price – also for 1 thousand dollars.
Features of the strategy
By working with a similar binary options trading strategy, you will be able to reduce possible losses. However, it does not guarantee compensation for all losses, since the day may close at the price between the options you purchased.
This method is most advantageous to use with short timeframes so that the price cannot go far from the transaction you are making.
One-time purchase of PCI and CALL options from the broker Olympus Trade
In order for hedging trading to bring you income and be comfortable, work in the terminal of a trusted broker Olympus Trade. The modern platform has all the necessary functionality for modern profitable trading: a convenient personal account, up-to-date analytics, a detailed history of transactions, a set of indicators, a choice of options and expiration (from a minute to an hour), market news and much more.
You can get acquainted with traders’ reviews about Olympus Trade, as well as ask questions to professionals, here. You can see what the workspace of the trading platform looks like in the image below.
A detailed review of the Olymp Trade broker is here.
Go to the official website of the broker Olymp Trade here.
In order to buy a
CALL
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option by specifying:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: UP
- Click the “buy” button and follow the results.
In order to buy a
PCI
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: DOWN
- Click the “buy” button and follow the results.
Real reviews about Olympus Trade
Bonuses of the broker Olymp Trade
The official website of Olympus Trade pays special attention to stocks for its traders. Bonuses can increase your chances of earning decent money without investing personal funds. Hurry up to take advantage of the starting bonus, which will double the deposit. The amount of the bonus depends on the amount deposited (according to the terms of the promotion).
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