How to open an FBS account?
Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to withdraw the money you earned with FBS?
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
Wise traders usually try to decrease the risks and have the same (or more significant) return on their portfolio. One way to lower the risks is futures contracts, and the other is options. In this article, we’ll define how the straddle option strategy works and what are the benefits of using it.
What is the straddle option strategy
There are two types of options: call and put. Traders buy call options when they expect the price of the underlying asset to rise. On the contrary, if they anticipate a price decrease, they buy put options. Also, options have an expiration date, a period to close the option. A strike price is an expected price of the underlying asset. When we buy options, we pay the premium to the seller. Consider this as a commission for the trade.
To make a straddle option, we need to buy put and call options with the same expiration date and strike price. The straddle option will work as a bet on the volatility increase because it’s almost the same as when you open a buy and sell trade for an asset. The difference is in the options nature that gives bigger returns when the stock moves away from the strike price.
What is an example of a straddle
Imagine you expect a massive movement in Tesla stock but don’t know the direction. Then you may buy the call and put options with the same expiration date and strike price. From now on, you have a trade that costs you the premium. You will be in profit if the price moves far enough from the strike. On the contrary, your loss is limited by the premium.
Be aware that options are among the riskiest assets, and the losses can be unlimited if a trader makes a mistake in placing the orders.
2022-09-02 • Updated