Best strategy in binary option trading | Top 10 strategies
The Binary Options Signal Services will allow even the newest and least experienced binary options trader a way to make money trading binary options without even having to learn about binary options.
If you are an extra cautious person and like to keep your investments safe and secure, this system is best suited for you. This system invests money in trades while being completely agnostic of the past outcomes. If you are content with decent and near linear profits, then you can choose this system. Remember, in binary options trading, the more risky trades generally fetch the greatest dollar.
The way it works is straight forward. With demo trading, you are given a certain amount of fake money to start out with. You can use that money anyway you see fit. The platform you will be using for demo trading is the same platform that you will use when you’re actually trading with real money, so demo trading helps eliminate the learning curve and any mistakes that you might make while figuring out how to use the software. US Traders can open a Nadex Demo Account in just a few minutes.
Many people shy away from this type of investment because they are misinformed or lack knowledge about it. However, they could be missing out on some profitable trades.
Suppose the stock of XYZ company is trading at $40. A call option contract with a strike price of $40 expiring in a month's time is being priced at $2. You strongly believe that XYZ stock will rise sharply in the coming weeks after their earnings report. So you paid $200 to purchase a single $40 XYZ call option covering 100 shares.
Assume the futures contracts on the Standard & Poor's 500 Index (S&P 500) is trading at 2,. An investor is bullish and feels that the economic data being released at 8:30 am will push the futures contracts above 2,060 by the close of the current trading day. The binary call options on the S&P 500 Index futures contracts stipulate that the investor would receive $100 if the futures close above 2,060, but nothing if it closes below. The investor purchases one binary call option for $50. Therefore, if the futures close above 2,060, the investor would have a profit of $50, or $100 - $50.
Since they can be no limit as to how high the stock price can be at expiration date, there is no limit to the maximum profit possible when implementing the long call option strategy.
General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
It takes just 3 easy steps to get you using the binary option robot in no time. Once you have done that, you are ready to make trades based on the robot ...
It is advisable not to bet more than 5% of one’s capital in one position. Thus, if you have € 1000 on your binary option account, it is not advisable to bet more than € 50 in a single transaction. In the same token, it is not advisable to bet on a too large number of instruments that are correlated in the same direction. For example, it is not advisable to bet simultaneously on the fall of the EUR / USD, EUR / GBP, EUR / CAD, EUR / JPY, EUR / CHF … etc. In this case, you understand that a single jump upwards of the Euro currency (EUR) could jeopardize all your positions.
As already mentioned, binary options are not difficult to understand. You as a trader don’t have to own a certain asset to trade it, as you are placing a trade based on the price prediction.
Every binary trade has several elements:
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Take a look at the screen shot to the right that is from my Etrade account. This shows that Microsoft (MSFT) is at $ and that the April options expire on April 16, 2011 and that the strike prices for the call and put range from at least $23 to $28 and are at every dollar in between.
What does this European style option mean for the trader? It means that the you are concerned ONLY with the price of the stock or index at its expiration. European style options tend to be cheaper than American style options because if a stock spikes prior to expiration, an American style call option trader can capitalize on that increase in value, whereas the European style call trader has to hope the price spike holds until expiration.