Binary options trading allows for many strategies. Among the most simple ones are directional bets with Calls and Puts. In these situations, traders bet on either assets going up or down. However, there are other strategies to pursue. In this article, we discuss a straddle strategy.
Binary Options Straddle Strategy
When a trader enters into a straddle, it means that a bet on both directions is made. Thus, both a call and a put are bought. Straddles are often used during periods of greater volatility. With this strategy, a binary options trader hopes that at least one leg of the trade ends up in the money.
It is also possible that both legs produce a winning outcome. This is hard to do with options that need to expire above and below certain levels, and were entered for exactly the same expiration period. Then, only one leg will likely be a winning outcome. In that situation, a trader needs to ensure that the payout from one winning side (whether a put or call) compensates for the cost of both options (a call and a put). This, most of the time, is difficult to do.
However, if options are entered for different periods of time, then a two-side win is possible. For example, a 60-second call could be purchased together with a 5-minute put on the same asset. This particular strategy can produce positive results if the asset price first spikes up and then declines.
The likelihood of it happening can be determined by looking at charts and other indicators such as Bollinger Bands, Moving Averages, and Relative Strength Index (RSI) among others. For instance, the asset’s price may be approaching a peak (based on the previous price action), while RSI is weakening.
It is possible then that the price will stay at that level for a short while (especially if that happened before and the pattern is about to repeat), so a 60-second call may be acquired. At the same time, if technical indicators mentioned above indicate that the price is likely to start falling, a put for longer period of time (5 minutes or even longer) can be acquired. Since both a call and put are being bought, a straddle is created.
Another way to bet with straddles is by acquiring One Touch Options. Both calls and puts don’t need to expire at favorable price, but rather need to touch that price level during the options’ life. This way, both sides can be bought for the same period of time, and this strategy will work if that time period is long enough for the asset to move up and down enough to trigger the touch points on both sides.
Yet another way to go about straddle trading is by buying puts when the price seems to peak out and is likely to fall, and then, once it falls and reaches the bottom, to buy a call. This set-up actually is not a pure straddle since both calls and puts aren’t entered at the same time, but still resembles straddles in most respects and can, indeed, be profitable.
Services for Binary Options Traders
Quality binary options brokers such as Ultra Trade offer access to trading of multiple assets including stocks, indices, currencies, and various commodities. All these assets can be traded from a single account on a single platform. Various binary option kinds are available, so this way traders can pursue multiple strategies.
UltraTrade offers advanced charting and technical analysis tools as well as educational resources for its clients. What’s more, trading signals are provided in order to pinpoint trading opportunities for multiple assets that are accessible via its trading platform.
Your Basic Guide To Creating A Unique Investment Blog
Starting your own blog is great and once you get the ball rolling, it can be a good passive income...
3 Low-Risk Ways To Get Your New Business Started
Once you’ve got an initial business idea and believe that it will be a success, there are some basic things...
Conquering the Co-free Zone: Tips for Thriving as a Remote Worker
Adjusting to an office environment can come with its downfalls in the sense that it might be a shock to...
3 Ways To Take Control Of Your Finances Starting Now
If your finances have taken over and are bringing stress to your life, we understand just how overwhelming it can...
Best Places To Visit In The North Of England
If you live in England, you will know there are many different places to visit for the weekend. There are...
Green Home Improvement Ideas
In a world where environmental concerns are growing, the concept of “green” has gone beyond a trendy catchphrase and is...
How to Host an Unforgettable House-Warming!
The time has finally come. You have moved into your dream pad, and are officially adulting in your very own...
A Guide to Parking Lot Striping
The journey to a well-striped parking lot begins with the right paint. In this brief guide, we’ll unravel the mystery...
Business Tips For Protecting Your Finances During A Recession
In 2023, taking the necessary steps to protect your finances for your business is now more important than ever. The...
Tips For Cleaning Your Trainers
If you’re into your trainers and streetwear, you’re likely to be very conscious of keeping them looking their best! So,...
Branding Trends For Start-Ups in 2023
Branding is incredibly important as it impacts how your business reaches and connects with its target market. If you’re branding...
Avoiding the Wrong Kind of Growth
Growth is vital for any business – some models, like tech start-ups, are built around periods of dramatic, explosive growth...
How To Become A Property Developer
There are several reasons why an individual will want to become a property developer. One of the main reasons for...
What Is The Difference Between Cyber Attacks and Cyber Threats?
If you own a business that uses the cloud to manage workloads, you have probably heard of the terms cyberattack...
3 Types of Marketing Every Small Construction Business Should Do
Construction is a very saturated sector, whether you’re a large or small construction company, so marketing should be at the...
Tech9 years ago
Creating An e-Commerce Website
Tech9 years ago
Design Template Guidelines For Mobile Apps
Business4 years ago
What Is AdsSupply? A Comprehensive Review
Business8 years ago
The Key Types Of Brochure Printing Services
Law3 years ago
How Can A Divorce Lawyer Help You Get Through Divorce?
Tech6 years ago
When To Send Your Bulk Messages?
Tech3 years ago
5 Link Building Strategies You Can Apply For Local SEO
Travel12 years ago
Who Else Wants Also Nfl Hat