60 Second Binary Options Trading
Binary options trading has revolutionised the concept of options trading by allowing traders to buy and sell options without having to have a large deposit. They operate in a similar way to traditional options by letting investors purchase them with a specific expiry date in mind. Unlike traditional options they are incredibly simple to understand and only ever have two outcomes-in the money or out of the money.
When you purchase a binary option (also known as digital options)you will state how much you are willing to invest and you will be told how much you are set to earn should you be right in speculating on price closing above or below the strike price. This amount never changes once the binary option has been purchased regardless of the degree that price closes above or below the strike price. Similarly, as an investor you always know exactly how much you are set to lose before you even enter the trade.
So, the attraction with binary options is their simplicity and all-or-nothing outcome. Many traders find it easy to speculate on whether price will rise or fall but harder to try to work out exit strategies or how much profit or loss to take. Binary options work this out for you with their closing price determining the profitability of a trade. These expiry times are typically between 5 minutes and 1 month depending on the type of trader that you are. However, there are also binary options provided by one company which allows for 1 minute trading.
60 second trading with options was previously considered almost impossible due to the speed that information would need to pass between brokers operating on multiple contracts with thousands of client. Luckily, modern technology and the advent of the web-based trading platform allow previously complex transaction and derivatives markets to exist and trade incredibly quickly on real-time data. 60 second binary options’ trading therefore allows an investor to purchase options with an expiry time in one minute. Ideal for scalpers, these short-term options are for fast-fingered traders who see price movements on a very short-term scale. Fast-moving markets benefit from these options as traders can quickly enter and exit simply needing price to remain above or below the strike price for the 60 second duration.
One pioneering broker currently offers 60 second trading and was launched in 2011 due to the demand from the trading community to provide short-term binary options. TradeRush.com offer up to an 81% return on their 60-second binary options. This means that for every $100 you invest for that one-minute your position will close either ‘in the money’ with £180 return, or ‘out of the money’ with around a $15 return. The basis for having money returned even if your investment fails to close in the money is a ‘protection rate’ which most brokers generously offer between 10-15% of your initial investment.
The benefits of trading such fast-moving options is, as Traderush.com advertise, knowledge is power. The frequency of, for example, news stories causing price to swing dramatically in one direction is great for all traders who like to trade fast moving markets. However, they are also incredibly risky- not only getting caught on the wrong side of a trade and then fighting to get out but also in trying to establish an exit once you are in the money. Binary options obviously have the benefit of removing both of these dilemmas. You can only lose as much as you agreed before taking the trade and you can also only win as much as you had agreed. For 60 second traders this removes a large element of thought from the trade and means that those who are particularly good at spotting short term trends or the high-likelihood of a swing in one direction for several minutes this becomes an excellent trading tool.
60 second binary options’ trading is therefore an excellent trading tool for news traders and also for technical analysts who can operate on very short-term charts. Some candlestick analysts would also benefit from trading on micro timescales and binary options with just a one minute lifespan would be ideal for this. Due to the fact that many spread betting firms rarely provide charts with enough detail to trade on a-one minute chart; often many scalpers have to make do with 3-5 minute charts.
The provision of detailed one-minute charts, as well as fast execution mean have attracted a lot of scalpers from spread betting to binary options with Traderush.com. Although it is, of course possible to open a spread trade and close this within one minute, because spread betting relies on the degree of profit or loss to determine how much is made or lost it can be risky and also fairly pointless to trade such short moves unless your stakes were considerably large.
The negatives of trading such short-term charts are basically the same for all speculation. Binary options do carry risks and these are often enhanced with the lower timeframes. The adrenaline and excitement of trading for considerable gains can be difficult to contain and the sheer number of trades that are possible in any one day make it very much a trading tool for those who have good trade discipline. The need to have a plan and a limit on the number of trades per day as well as a good idea of how much you can afford to risk are essential for 60-second trading. The limit of $100 per trade with Traderush.com goes some way to limiting this, although this is still potentially $6000 per hour!
60 second binary options have revolutionised trading and pushed online trading technology to the limit. The need for reliable connections and prices underlies the entire market. Whilst many struggle with trading on the 5 minute charts, there are many who are particularly good at spotting very short-term opportunities and using binary options will allow them to be profitable regardless of the degree to which the trade moves in either direction. As a straightforward and simple way to trade, binary options remove many of the difficult questions concerning exits, losses and profits. These are all predetermined allowing trades to focus only on the direction-up or down?