Strategies “Strangle” and “Straddle”
Due to the fact that there are many strategies for trading binary options, this allows each investor to work individually in the market and create combinations of a system that ensures high profits. The “Strangle” and “Straddle” strategies allow you to work more efficiently in the market.
Strategy “Strangle”
The “Strangle” strategy is popular in binary options trading. It makes it possible to trade call and put options of the same asset at the same time with the same expiration, allowing you to get decent earnings from increasing or decreasing the prices of the underlying assets.
Simultaneous purchase of CALL and PUT options with different strikes (i.e. different strike prices) can bring a good income to the trader. In most cases, the purchase of strangles directly depends on market forecasts, their construction is based on out-of-the-money options.
Abbreviations:
• Lower TB is the lowest break-even point.
• Top TB is the upper break-even point.
• Qi Put – the strike price of the purchased Put option.
• CI Call – the strike price of the purchased call option.
It is best to acquire a strangle when asset prices should start moving, and such a movement should be significant. The successful operation of the strategy is due to the release of prices beyond certain boundaries of the corridor. If the trader’s predictions are incorrect, his losses will only be the sum of the premiums paid for the options.
Selling a strangle is carried out in reverse order, and means opening a short position for CALL and PUT options with different strike prices. This signals that the focus is on a price change or price change in a fixed range. If the forecast comes true, the option generates income without exercising it. But if the forecast does not come true, the option will be exercised and bring a loss.
Strategy “Straddle”
This strategy is similar to the trading system described above. Its difference is that during trading, traders buy options with the same strike price.
Both strategies have their pros and cons. The cost of one straddle is the price of several strangles, i.e. Strangles are cheaper. The income from the strangles will be less, when selling the strangle, the income will be in a narrower corridor.
Strategies “Strangle” and “Straddle” at the broker Olympus Trade
In order for trading with these strategies to bring you income, work in the terminal of a reliable broker Olympus Trade. The platform has all the 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.
Test the Olympus Trade platform
Real reviews about Olympus Trade
Bonuses of the broker Olymp Trade
The official website of Olympus Trade pays attention to profitable promotions 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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