basic strategies
The transaction for the sale or purchase of currency is called a currency option, which is actually a contract that gives the buyer the right to buy or sell a currency.An option contract contains several elements which are: the amount invested, the direction of the transaction (purchase or sale), the option category, the strike price of the option, the option price, the departure date and time. Do not forget that a date of validity, called maturity or maturity.There are two types of option classes that are put (or call) the purchase is regulated by a specific date and amount. Here you anticipate an increase in the currency pair processed, so it is recommended to sell your option before the date of execution to generate profits. The call (or put) in the case of a regulated by a specific date and quantity sale.You expect the decline in cross (currency pair) and your gain will represent the loss incurred by the buyer. This method can represent significant losses but if the market plays against you, you can limit the damage, because you will only lose the premium you paid on the contract.
combined strategies
The best way to reduce your risk of loss is to combine different strategies together. Here are a few.
The combination of the straddle is to combine a call and a put option whose exchange is similar (same price and same expiry date). So you can anticipate changes in the cross but also the stabilization of the same course.The strangle strategy is identical to that of the straddle, except that the purchase price of the put is less than the purchase price of the call, and for the seller, the sale price of the put is lower than the selling price of the call.We talk to these two strategies of "market volatility" because combining the sale and purchase volatile fluctuations in our options are anticipated.
There are also other strategies are more complex, as the vertical distance, or the butterfly spread, the condor spread, or gap ratio, which are handled with care.
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