Strategies to Help You Get Started with Binary Options Trading

It should come as no surprise that binary options trading is fast emerging as a great alternative  investment channel and a genuine one at that. With real estate prices taking in 2008 and witnessing huge fluctuations ever since, people all around have been looking to find new ways to invest their personal finances.

Binary options trading has been gaining steam in the recent times as more & more people are reading about the simplicity of the binary options trading and the potential return on investment. The fact that it can be done completely online has also seen a lot of work from home moms and even working professionals experiment with binary options trading in spare time. While binary options trading is definitely becoming a viable investment vehicle, there are some risks to binary options trading just like any other investment. Therefore, it always helps to learn the right strategies for binary options trading before you jump into it.

Here are some binary options trading strategies that should come in handy if you want to start with binary options trading:-

JPASSOSIAT STRANGLE STRATEGY UPDATE

Book profit in JpAssosiat 90 put @ 2 and  contd..to hold call

CALCULATION OF P & L IN OPTION

While it comes to calculation, there is thing we have to learn  how to calculate profits/losses are calculate. 

Let’s go with an example, nifty to understand better how profits and losses are calculated in options trading. The lot size of nifty is 50 shares in number irrespective of call or put. The profit/loss does not depend on the type of call (nifty call option or nifty put option), expiry or strike. It directly depends only on premium which trader selects while purchasing the option.

HEDGE A CALL OPTION WITH A PUT OPTION ?

Sometimes an investment has made substantial gains, but you're not ready to sell the assets just yet. At the same time, you don’t want to risk losing the profit you’ll get by cashing in immediately. When you face this dilemma with call options, you can hedge your position with offsetting put options.

Calls and Puts

When you purchase call options on stock or another underlying security, you receive the right to buy shares at a designated price called the strike price. You can exercise your right to buy until the option expires, but you are not required to do so. Put options work exactly the same, except you get the right to sell a security instead of buy it. Suppose you buy a call and put option contract for the same stock at the same strike price. If the stock price increases, you would exercise the call to buy shares at the lower strike price, and then sell at market value, netting a profit. The call option is said to be “in the money.” The put option has no value, because you pay more to buy the shares needed to exercise the option than the strike price you are paid. However, if the price of the stock falls instead, the call option would have no value and the put option would be in the money.

OPTION TRADING STRATEGIES : HOW TO USE THEM FOR MAKING PROFIT IN ANY MARKET SITUATION

 How to Use Option Trading Strategies in any Market Situation

Option strategies are implemented by combining one or more option positions and possibly an underlying stock position.

In other words, a trading strategy is a calculated way of using options singly or in a combination, in order to make a profit from market movements.

Option strategies can give you a greater profit with less risk compared with the traditional buying and selling of stock.

One vitally important thing to consider when investing is when to get out and how. An effective exit strategy needs to be decided upon in advance, and stuck to without allowing emotions to sway you.

There are many types of option trading strategies that can be applied, depending on your opinion, or ‘prediction,’ of which direction the underlying stock is going to move.

A guideline for picking the right stocks to go with the right options strategies is available by reading “Options Strategies for Different Stock Styles”. The various stock movements are taken into account – bullish and bearish – as well as major moves, or slower, moderate moves, in either direction - and a strategy that can be applied to each of these movements.