strategyIn the finance world, many investors choose to trade with strangle option strategy (Long or Short) because the profits amount is unlimited in most of the cases and the level of the potential risk is under control. This type of online trading options consists of the purchase or the sale of some specific option derivatives. This gives traders the possibility to accumulate profits depending on how dramatically and suddenly the price of the underlying asset changes.

So, here it doesn’t really matter what the direction of this price movement is. When investors buy some particular options this trading type is called a long strangle, while the opposite action is known as a short strangle. The good thing in dealing with Strangle Options is that traders can actually balance the price of opening a strangle vs. the chance for earning significant profit.

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Long Strangle Option Strategy

This trading options strategy requires traders to buy both a ‘call’ option and a ‘put’ option of the same underlying asset. Investors that deal with this type of trading earn profits if the underlying asset’s price moves far enough from its current position, no matter if it will be a HIGH or LOW movement. Therefore, it is advisable for traders to choose a long strangle strategy in the cases they believe tin the high volatility level of the particular underlying asset, but at the same time they don’t know what direction it will actually take. So, it is clear that this online trading strategy has a low risk level and also an unlimited possibility for accumulating significant profits.

Unlimited Profit Potential

Traders are in fact given the chance of earning really significant profits with dealing with the long strangle option strategy each time they are sure that the price of the underlying asset is going to have a really significant move either up or down at expiration.


However, people should be aware of the fact that they can experience serious financial losses too. For instance, the maximum loss possible when dealing with long strangle options strategy is at hand when the price of the underlying asset is somewhere between the strike prices of the bought options. In this case, both these options expire worthless and the investor loses all the investment amount he has placed at the beginning. One can minimize the losses thanks to a trusted binary options trading system.

Commissions

commssionThis is the part of the deal where every online investor should carefully calculate his options in order to sign-up for the best and the most advantageous trading process available. This is of critical importance for traders, due to the fact that is they are willing to trade actively, commissions can deprive them of significant part of their profits in a long term perspective. Therefore, every active and consistent traders should wisely choose a really low commissions broker.

Short Strangle Option Strategy

This trading option strategy provides investors with the possibility and the obligation at the same time to buy some specific asset at some particular strike price ‘A’ and to sell the same asset at strike price B.

In this case, it is clear that traders are making the assumption that the asset’s price is not going to dramatically change. On the contrary it should remain somewhere between strike A and strike B in order to get a profitable outcome in the end of the deal. So, in this line of thinking if the trader decides to sell two options, he would significantly increase the income would get if he only sells a ‘put’ or a ‘call’ option. However, there is another problem in this situation and it is in the fact that the risk level is unlimited on the upside and substantial on the downside boundary.

In Short

Dealing with online investment processes is something very popular among both average and really experienced traders who want to find a profitable way of changing their lifestyle and social status. The variety of available trading solutions is really great so investors can choose among wide range of options which to fit them most. When talking about strangle option it is important to be noticed that people should have at least some basic knowledge and feeling in order to successfully execute this type of deals and take the best out of it.

How to Choose Binary Broker?

right choiceIn order to start trading online you need to open an account with legit and trusted broker. In this field there are numerous non-regulated brokers, most of them with shady reputation.

Still, we are struggling to find the good ones and provide you with their unbiased reviews and customer feedbacks. Trading binary options is not absolutely free of risk but we can help you minimize it.

By researching the market daily and following the financial news, the team at Top10BinaryStrategy is always up to date with the latest alerts, and upcoming launches of trading systems, and brokers.

We advise you to Open Account with Top Rated Broker OR Choose from Our List.

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