The Right Way To Trade Bollinger Bands®
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As the inventor of Bollinger Bands®, analyst John Bollinger discusses some of the misconceptions about trading the bands and how using them on multiple time frames can be advantageous.
A type of option where the payoff depends on both the price levels of the strike and the underlying asset, like standard options. If the binary option expires in the money, the trader will always receive a fixed $100 compensation per contract. If the option expires out of the money, the trader receives nothing.
Writing an option is the process of selling to another investor the right, but not the obligation, to buy or sell a stock at a given price in the near future. It can also be referred to as shorting an option or selling an option.
A butterfly spread is a neutral options strategy with both limited risk and limited profit potential. The strategy involves four options contracts with the same expiration month but with three different strike prices. Using either all calls or all puts, an investor sells two options at a middle strike price, while simultaneously buying one contract at a lower and one at a higher strike price.
Discover how this sophisticated trading technique can unlock significant gains while reducing your losses.
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