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Jul 11

Binary Options trading

Binary options trading have been around since 2006, but it was not until I setup this site when I came across it. I read and studied binary options trading and to my astonishment, binary options trading is way simpler than the options trading I paid to learn. There are:

  1. NO technical jargons
  2. NO need to know technical strategies (such as butterflies, condors, straddles, strangles, spreads and etc) if you chose not to know although I opinionate that these strategies can be applied in binary options trading.
  3. NO worries on time value decay of options
  4. NO or very less emotions involved in stopping losses or letting profits run
  5. NO pattern day trading rule
  6. DO need fundamental knowledge of technical chart reading (my opinion)
  7. DO need to be aware of current market sentiment

Binary Options TradingSo what are binary options trading? Binary options are contracts entered by traders to predict whether an underlying asset (to that binary option) will rise or fall. Traders either buy a call contract (predicting that the price will rise) or a put contract (predicting that the price will fall). A trader profits if the prediction of the trader is correct (or “in-the-money”) and gets paid a fixed percentage between 65-80% of the trading value. In a nutshell, a trader only needs to assess and predict the price movement (either rise or fall) of the underlying assets to profit and need not care about anything else (items as mentioned in no.1-5 above). Learn more about binary options here.

Assets currently available for trading for binary options are:-

  1. Indices – major indices around the globe
  2. Stock equities – selection of some of the bigger corporations from US, Europe, Asia and Australia.
  3. Currencies – major paired currency around the world
  4. Commodities – few majorly watched commodities around the world

I have recently opened a trading account with EZTrader and tested out its trading platform. I have chosen EZTrader simply because of the larger asset list/index to trade. And EZTrader has all the underlying assets which I currently monitoring; AAPL, AMZN, NFLX and BIDU. So, EZTrader is it! Might write a review on the other binary options brokers which I considered before in another post.

So, what’s my take on binary options trading? Cynically, with all the technicalities and strategies employments in options trading (almost) gone, except the technical charting knowledge that I still use to enter trades, somehow rather I feel I am walking a fine line between investing and gambling. But, then again, I enter my trades in binary options on skill and use of a system based on research, not on gut feel and emotions; this is always my trading psychology.

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