Trading Strategies to Maximize Profits with Binary Options
Binary options are one of the most widely used investment platforms that offer excellent returns on your money. The beauty of binary options is that traders already know potential profits and losses even before an asset is traded. This asset is usually a stock or a FOREX currency depending on your choice. Your investment gains when the strike price (the price you are betting on) is above the price of the asset at the time of the expiration of the option. This expiration period can last for hours or days. On the other hand, you lose if the price you initially bet on is lower. Binary options only come in two outcomes – it is all or nothing. You get nothing if you lose but you also take everything when you win.
There are trade secrets in binary options to maximize profits. Investors use this to get the most out of the money they placed. Since, binary options are very friendly for first time investors, most people familiarize themselves with various strategies to help them get ahead of the game. Not only that, seasoned investors have been using these strategies for many years and it proved to be helpful to them.
One such strategy is binary straddle. It is dubbed as the best binary options trading strategies. Given the fact that binary options trading mainly consists of predicting asset movement to win a bet, the straddle allows you to be on both sides. The strategy is to be on both ends of the trade so that you can have profits from either way. To do this is to place a “call” and a “put” on the same asset. You can place a put on the asset as high as you possibly could and when the market is going down you place a call on the opposite direction as it returns back up. The advantage of using this strategy is it places you in the position of two winning trades, therefore limiting your risks.
Another strategy that you can implement is binary strangle which is used for hedging purposes. A “strangle” is a situation when the trader purchases the put and call options for a parallel asset having exactly the same expiry date. The strike prices always differ greatly for both options. This type of binary options trading strategies is being used when the trader expects a big, sudden move in the money market but the trader is not really sure of the direction it may take. By doing the strangle strategy, wherein you purchase a call and put option for similar assets, you are assured of taking profits whatever may happen to the direction of the asset.
There is another option – hedging. Hedging is said to be one of the most lucrative binary options strategies because it basically guarantees the least risk in trading. Given the nature of binary options where agreements could last only for hours and markets fluctuate, you can use full or partial hedging in order to choose which options to hold or sell. In full hedging, individuals are allowed to trade commodity or whole shares to reap profits in an instant. Partial hedging only permits half of the investment to be traded while keeping the rest of the assets intact.
The binary options trading strategies mentioned above can greatly help you regardless if you want to pursue binary options trading for a short or long time. When properly implemented, these strategies will definitely help meet your investment targets.