basic Binary options trading strategy
Binary options trading strategy is a simple but effective technique for binary traders. This strategy should be considered when the trades start during the correct direction. That means that if you purchased a call option and this marketplace raised (you are in this money but still need to wait until the expiry) you might use this strategy to aim substantial with low risks. The strategy is ideal described with an example, so goods on the market we'll do. Here is a sample on how this strategy are available:
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| Binary options trading strategy |
Step 1: You buy a good call option on EUR/USD on 1. 3500 worth $100 considering the expiry in one hour, a payout of 80% together with a refund of 10%. The market moves advantage to 1. 3520 (20 points with the first 15 minutes). In this particular given situation, the strategy should be considered as described in the next thing.
Step 2: You buy a put option about the same asset (EUR/USD in this case) when using the same value at 1. 3520 (the option need the same expiry as the one, and it will have an identical payouts since it is about the same asset).
There are three possibilities from the expiry:
1) The closing cost is above 1. 3520 -> the first option finishes within the money and the second one right out of the money. Total investment $200 and total payout $190 ($180 belonging to the winning option and a $10 refund in the losing one). Outcome: a reduction in only $10
2) The termination price is between 1. 3500 and even 1. 3520 -> both options finish with the money. Total investment is also $200 and total payout is usually $360. Outcome: a profit associated with $160
3) The closing cost is below 1. 3500 -> the first option finishes right out of the money while the second one finishes during the money. The outcome is very much like in the first situation: a reduction in $10
As you can see in the above example, by using this basic strategy you can use a good start and threat only an insignificant amount together with the chance of winning big. In this particular situation people risk to lose $10 for you to win $160, which is an incentive to risk ratio of 16 to at least one.
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