Thus if the cryptocurrency caps at the predicted target, it will then be sold at the target price which is $15,000, leading to a gross profit before commissions of $5,000 (which is the profit of $5,000*1 BTCUSD bought then sold).
On the other hand, if the BTCUSD price falls below $8,000 and your stop-loss limit is triggered and executed successfully, your overall losses would be limited to $2,000.
For the more experienced investor, you might expect BTCUSD (trading at $10,000) to move in a sideways direction over the course of three months, with the upside target being 12,000, and the downside is $9,000, or alternatively for BTCUSD to experience a significant move in the short term. For these more advanced trading strategies, the options market may be considered.
Overall, options always provide much more flexible methods to strategize, as well as structure directional trading processes as opposed to conventional trades which are easier to understand (long/short trades).
Directional Trading Example
Overall, options always provide much more favorable and flexible methods to strategize, as well as structure directional trading processes as opposed to other trades. (long/short trades).
This is why the options strategy is used by some investors, it can offer a great advantage if structured and used well. For investors who want to keep things straightforward, the conventional long/short strategy is preferred.