This approach is time-consuming (traders end up being glued in front of their trading screens) and exhausting (they’ll focus on not missing even a swing). Scalpers use lower time frames, the one-second, one-minute and even five-minute charts. While for the Forex trading industry this still makes a bit of sense because of the higher risk-reward ratios that can be used, for the binary options industry this is a deadly approach for the trading account.
Banc de Binary offers a variety of trading assets including 23 indices, 8 commodities, 25 currency pairs and 97 stocks. Since our last visit, we noticed an increase in these numbers, especially in the number of stocks now offered. All of the standard expiry times apply including One Touch, 60 seconds trading and even an Option Builder which allows the trader to choose their own expiry time.
This is a quite popular strategy in options trading. It is mainly concerned with the study of the past, using different parameters such as charts in order to predict the future price of an asset. This method is not concerned with getting the intrinsic value of an asset. It’s quite useful in options trading because as a trader, you don’t have to delve into the company’s financial statements. Among the tools used in technical analysis include Bollinger bands and Moving Average among others.
In the online binary options industry, where the contracts are sold by a broker to a customer in an OTC manner, a different option pricing model is used. Brokers sell binary options at a fixed price (e.g., $100) and offer some fixed percentage return in case of in-the-money settlement. Some brokers, also offer a sort of out-of-money reward to a losing customer. For example, with a win reward of 80%, out-of-money reward of 5%, and the option price of $100, two scenarios are possible. In-the-money settlement pays back the option price of $100 and the reward of $80. In case of loss, the option price is not returned but the out-of-money reward of $5 is granted to the customer.