What are the shafts and strangles?

Call option is the right to buy a given asset for a fixed price for a specific date or before a specific date. PUT is the right to sell the asset for a fixed price for a specific date or before a specific date. The call increases when the price of the underlying asset rises; When the price of the underlying asset drops, it increases the value. Straddles and Strangles are the possibilities of business strategies that combine both poses and calls to create positions that do not depend on the market movement for their profitability.

The long straddled position is designed by purchasing PUT and calling for the exercise price at the current price at the current price under the arroptual Asset. In order to become profitable, it must have a basic change in price greater than the total cost of tweak and the price change must occur before expiry. If not, the coating expires worthless. Since the paint can never have less than zero, long horrors have a limited risk and unlimited profit of the potinth.

The short position of Stredde is built by the sale of PUT and calls for a powerful price at the current price of the underlying asset. Because the possibilities are sold rather than purchased, the position is initially as profitable as it can be. In order for the basic price to remain profitable at the expiry, it must be lower than the combined price obtained by the sale of Straddle. A short deployment carries unpredictably high risks and limited profitable potential.

Long strangled position is designed by purchasing PUT and calling for exercise prices at a certain distance from the current price of the underlying asset. When it comes to profit and loss, it acts very much like a long paint. The advantage over the threats is that it costs less and therefore has a lower maximum possible loss. The disadvantage is that to become a profitable movement, it requires an even greater step.

Short harassment is designed by the sale of put and calls for an exercise price of a certain distance from the current inEnd of underlying asset. It has the same characteristics with limited profits, unlimited losses as a short coating, but requires a greater change in the price for money lost.

Generally, traders prefer to sell Straddles and buy strangulation when the expiry date is far away in the future; On the contrary, they prefer to buy horrors and sell strangulation when it is in the near future expired.