Binary Option Trading - Scenario For a Successful Binary Options Strategy
High Yields Attract Investors to Binary Option Trading
Yields around the rapid turning trades range from sixty percent to in some cases seventy five percent. It's literally impossible to compute the compounding rates of return on a few of these investments because the yields are so high. Here's an example of the way a trade payout might look.
Let's presume first the trade expires in the money. What would a 2 hundred dollar investment in seventy five percent yielding call options payout? The answer is a $200 trade in a contract pays $350 ($200 capital investment plus 75% profit of $150).
What would happen though if the position expired out of the money? This is when brokers can differ significantly. Sometimes a trader can unload an out of the money put or call just before expiration - however, many brokers operate differently. An unsuccessful trade might pay $30 (15% from the original $200 investment at expiration) on some particular securities. In other cases a trader is probably not able to move their position whatsoever. The bottom line is that it's nearly impossible to find out of an from the money trade.
A Binary Options Strategy
One possible way to lessen the possibility of getting destroyed while using the all or nothing binary option trading contracts is by pairing up an within the money call (for example) with an at the money put. This could produce a nested position where the trader makes money when the spot price at expiration is between the two strike prices.
One binary options strategy involves pairing a put having a call into a hedge and double position. Binaries trading includes a simple up or down payout structure - making it simpler to understand than other types of options trading. See the benefits of opening a binary option trading account. Often it takes only two successful $200 contracts per day to make $300 in profit daily.