Binary Options are No Problem in Post-Holiday Slow Markets

binary options

These days have observed a higher trade in the S&P 500 futures in the early stages of the session which find a 2087.50 high. Even though some people may find the current price action to be overbought and having to close lower off the highs of this week, you will still find buyers who are pushing for a higher market and initiating a short for this market will be difficult.

With Nadex offering binary options, people are able to take a limited risk market position and craft a strategy that will fit their view and risk reward requirements.

At the moment, there is a 2087.00 trading for ESH5. If the week’s close remains below the price today, there could be a shortening of the 2085.00 daily option for the Nadex US500 (Mar) at a $50.00 price or better. This means people will get a $50 credit on their trades and will have the ability to maintain it if there remains a ESH5 close that stays below 2085.00. The risk to the trade would be the difference between the option value of $100 and the $50 credit which would leave people with a $50 risk. This would result in a 1.1 reward to risk ratio on their trade.

If there is a higher close today, people might want to consider purchasing the 2088.00 daily option for the Nadex US500 (Mar) which is priced at $50 or better. You can trade binary options online on Optionrally or Optionweb. Potential profits on this would be the difference between the $50 price to purchase the option and the $100 option value which will leave a $50 potential profit. Any risk would be limited to the $50 cost of the trade and offers a 1:1 reward to risk ratio which may be profitable provided there is a higher than 2085.00 close this week for the E-mini S&P 500 futures.

There are weekly, daily and even hourly expirations offered by Nadex which are based on a few factors which include both US and international energy metals, indexes as well as forex products. The range of expirations and products allow people many options when selecting a strategy and risk to reward profile that suits their view.

It is obvious that futures markets may be quite volatile; however, using Nadex’s binary options limits peoples risk to the amount paid when the trade was first started. Therefore, their stop-loss is built in already.

Keep in mind, you always have the choice to liquidate early should your trade begins working against you or in your favor. However, at expiration, only a single party either buyer or seller can get the $100 while the other gets nothing.

Take a look at the full list of all binary options sites.

Page Updated: January 23, 2015