NEW YORK ( TheStreet) -- Over the course of the last two months, the currency markets have been mired in a fairly obvious trading range.

With the range being held, traders who have become adept at finding different ways of capitalizing on this scenario are becoming more comfortable trading currency options, in addition to their spot forex trading.

Strategies being employed during these range bound periods usually involve the shorting (selling) of options, otherwise known as the shorting or selling of volatility. The combination of option time and market volatility, or uncertainty, gives value to options with strike prices that are out-of-the-money; there is no intrinsic value in the option price, the value is all in the time until expiry.

Buyers of options are those who purchase the instrument from the ones above who are selling (or writing). In range-bound markets, that may soon break, they are usually said to be buying time at a fairly cheap price. They are anticipating a volatile move, in both the market, and then by default the option itself, and that creates an anticipation that the trading range will get broken.

Traders will also buy options to hedge their primary spot (underlying) exposure, to replace the need for a stop loss in the cash market. The spot position is covered by the option value increasing if things move against the cash price.

The option seller wants to receive a premium for the option that they are writing, which they deem worthless as it has only time value because of being out-of-the-money, and therefore the option writer is willing to sell time, especially in a range-bound market