Find answers to queries on option trading strategies and binary options

Option trading has been around for over 30 years now and has been used by many for investment purposes. However, over the years, options have been given the identity of risky trading. It would be fair to state that options are not risky if you know the right way to trade in options. Its is important to know the terminologies and strategies and the right platform to trade. Read about strategies and other important factors on options trading

Answered By Connor Marsh | 3 years ago
  • Q: Between option trading and binary option trading, which is more profitable?

    The profitability depends on how you trade. There is good scope of earning profit in both type of trading and that is to a great degree dependent on how trading is done keeping in mind the strategies you can use for both and also the predictions you make.

  • Q: Can I trade options right before or on the expiration date?

    Yes, you have the right to trade options on expiration date or prior to it. However, trading too close to the expiration date is a gamble as options prices become increasingly unstable.

  • Q: How are binary options different from traditional options?

    The difference lies in pay off – payoff is the difference between the strike price and the price during the expiry in options. In binary, payoff is fixed amount of compensation if the option expires in the money or nothing at all. Other differences are in expiry time, execution and risk and rewards.

  • Q: How can I be a day trader?

    There are no specialized programs that can train you to become a day trader. This career prospect relies heavily on one’s economic knowledge about the ever-evolving markets, risk-taking abilities, strategic skills, and resilience. Therefore, you should start small in the field of options trading to assess your strengths and shortcomings.

  • Q: How do I learn about option trading strategies?

    There are online courses available for you to learn strategies and how to use them. You can also opt for free online videos uploaded by professionals. Making a dummy account and using the strategies there is another alternative to bring yourself to learn them.

  • Q: How important are strategies in option trading?

    In order to limit the risk and maximizing return, it is good to have knowledge of all the strategies you can play with while trading. One can also start trading with using any of the strategies or knowing about them too, but that can prove to be risky and hence you should learn about all the strategies known.

  • Q: Is binary options banned in US?

    Binary option trading is not illegal in US but many binary option outlets have been investigated by the US government as there have been many fraud cases over the years. Scammers steal $10 billion each year (approximately) and hence US citizens can trade binary options on government regulated platforms (brokers).

  • Q: What are bullish, neutral and bearish strategies?

    Bullish strategies are exercised when the trader predicts the stocks to go upwards. Bearish strategies are exercised when the trader predicts the stock to go downwards and neutral strategies are used for when the trader cannot predict the movement of the stocks.

  • Q: What are option trading strategies?

    Strategies in most contexts mean going for something or a plan in such a way that you benefit most from it. In option trading, it means the same. All option trading strategies fall under three categories, namely, bullish, neutral and bearish.

  • Q: What are some of the safe platforms for binary options trading?

    It is imperative to trade binary options only on regulated platforms. Some of the US government regulated brokers where you can trade are Nadex, MarketsWorld, BOL Financial. You are also advised to carefully go through the fine details and read reviews from customers before you choose a platform to trade.

  • Q: What is a forex trading strategy?

    A forex trading strategy is a tactical process that involves the application of a particular set of evaluations and techniques that help the trader decide whether to purchase or sell specific currencies at specific times. These strategies are based on technical analysis, economic trends, and current market scenarios. Forex trading strategies are developed by the traders or are readily available via various options trading platforms.

  • Q: What is the benefit of free forex trading strategies?

    Like the name suggests, free forex trading strategies don’t require any investment. You can use them to determine which trading system works best for you. In case the trading strategy doesn’t suit your profile, you can easily drop it without any financial loss. These strategies, however, can be incredibly useful and help you make money.

  • Q: What is the best way to start trading options with no experience?

    Options trading for beginners can come across as confusing. Therefore, to invest smartly, a beginner should hire an options broker who can help inexperienced investors master research, set objectives, and place and track trades.

  • Q: What is volatility in trading?

    Volatility is a statistical measure that quantifies the dispersion of returns for a market index or security. In simple terms, it is the rate at which the value of a security rises or falls; for instance, when the value of a security quickly changes within a short period then it has high volatility. Typically, in investments, higher the volatility, bigger the risk. An option’s value is primarily determined by the expected volatility.

  • Q: Which are some of the best options trading software?

    MultiCharts, TradingView, eSignal, MetaStock, Worden TC2000, INO MartketClub, NinjaTrader and ProfitSource are current examples of popular software for options trading.

  • Q: Which are the best binary options trading brokers?

    High Low, Binary Cent, Nadex, Binary Mate, Empire Option, IQ Option, 24Option, Olymp Trade, Binary Robot 365, etc. are some popular binary options trading brokers. If you are investing in any new binary options trading brokers, ensure that you crosscheck their legitimacy.

  • Q: Which are the best online brokers for options trading?

    TradeStation, TD Ameritrade, Charles Schwab, Ally Invest, Fidelity, and eOption are currently some of the most popular online brokers for options trading services.

  • Q: Which online platforms offer options trading tutorials?

    Option Alpha, Trading Strategy Guides, Investopedia, Online Trading Academy, and Elearnmarkets are some of the online platforms that offer options trading tutorials.

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