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Can you explain the concept of straddling and strangling in the context of trading cryptocurrencies?

avatarJuan ParraDec 26, 2021 · 3 years ago1 answers

In the context of trading cryptocurrencies, can you please explain the concept of straddling and strangling? How do these strategies work and what are their implications for cryptocurrency traders?

Can you explain the concept of straddling and strangling in the context of trading cryptocurrencies?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    Straddling and strangling are two trading strategies that can be applied in the context of cryptocurrencies. Straddling involves buying both a call option and a put option with the same strike price and expiration date. This strategy allows traders to profit from significant price movements in either direction. On the other hand, strangling is a strategy where traders buy both a call option and a put option, but with different strike prices. This strategy is used when traders expect a large price movement, but are unsure about the direction. By employing these strategies, cryptocurrency traders can potentially capitalize on market volatility and fluctuations.