Most traders who love trading online find binary options very attractive. This is because binary trading does not involve any rocket science. You just have two possible outcomes, loss or gain. After choosing an underlying asset, you can choose a call option if you think that the price of your chosen asset will increase and place a put option if a decrease in the price is expected. By using a sound binary options strategy, you can maximize your chances to get profit from this trade.
Gaining from a pairing strategy:
One of the most successful strategies that is used in binary options is called pairing strategy or straddle strategy. This strategy involves placing both put and call option on the same asset to make sure that you do not lose from the trade. Let’s take an example for a better understanding. Let’s say you have placed a call option on a certain stocks with an hour of expiry time. After half an hour you see that the price of this stock rises very fast. You know that this could be an indication of a sudden rise in activity in the market and the trend is not going to last for a long time. In order to cover your bases, you can choose to place a put option with the exact amount as the call option. It should be noted that the strike price of both options will not be same.
By using this strategy, you can ensure that at least one of your options expire “in the money”, giving you profit and minimizing your losses. Plus, you have a good chance that both of your predictions come out to be true and you enjoy maximum benefits of your pairing strategy.
Playing safe with a reverse strategy:
Then you have another strategy called reverse strategy which can help you minimize your losses. It is the safest and probably the easiest strategy to use, but it requires some knowledge of the market and factors that influence the market. Being a trader, you know that value of every asset is affected by certain market events which you need to know to plan your strategy. You have to wait until the event has happened and the prices are ready to get stable again. When the price of an asset touches rock bottom, there is good chance that they will increase after this point. So, you can place a call option at that time to gain from your investment.
You should always choose a good binary options broker out of several brokers on the internet to execute your strategies and moves profitably. Good binary options broker s can help you earn up to 75% of your investment and you could double your money in a very short period of time. Some brokers will give you a percentage rebate on your options that expire “out of the money” which helps ensure that you don’t lose all that you invested.
No matter which strategy you use, you should have some knowledge about the market and its trends. However, you should understand that like other trades, binary trading is not going to be free from risk. There will be times when you will make money or lose money. So, always take reasonable amount of risk to remain safe. Trade sensibly to profit from binary options!