BASIC STRATEGY OPTIONS

FRI 06 JANUARY 2017 BY KEENAN MISC

This strategy is very popular with options traders. It is designed and used by a trader to protect against total losses on their investments. You choose an underlying asset or currency that you are interested in, and then when the market movement of the strike price is heading towards a good direction towards the upside, you set a call option. At the same time, you will place a put option on the same asset.

Let's use an example:

The GBP / USD currency option is at 1: 4000. You place the $ 100 call option that expires in 30 minutes. The payout is 70% and 15% if you lose. In the first 15 minutes the value is 1: 4015, which is good. At this point, you are buying a put option for the same asset at 1: 4015 expiring in 15 minutes at $ 100. Payouts are the same as for the call option on Forex.

At the end of the 30 minutes there are two results;

Your 30-minute call option wins and the 15-minute put option losses. You have earned $ 185 from the 70% call winnings and the 15% consolation refund from the put option (the opposite can happen, bet option wins and call option losses). Both the call and the put options end up in the money. You get $ 340 ($ 170 + $ 170). Since it is almost impossible to lose on either option, the overall risk of loss in this strategy is only $ 15 to win $ 140.