How can I use strangle option trades to hedge my cryptocurrency portfolio?

I'm interested in using strangle option trades to hedge my cryptocurrency portfolio. Can you provide a detailed explanation of how strangle option trades work and how they can be used to protect against potential losses in the cryptocurrency market?

1 answers
- Strangle option trades are a great way to hedge your cryptocurrency portfolio. By purchasing both a call option and a put option, you can protect yourself against potential losses in the cryptocurrency market. If the price of the cryptocurrency increases, the call option will generate profits, offsetting any losses on the put option. On the other hand, if the price of the cryptocurrency decreases, the put option will generate profits, offsetting any losses on the call option. This strategy allows you to limit your downside risk while still participating in the potential upside of the cryptocurrency market. However, it's important to note that options trading involves risks and may not be suitable for all investors. It's always a good idea to consult with a financial advisor before implementing any hedging strategies in your cryptocurrency portfolio.
Mar 20, 2022 · 3 years ago
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