Binary Options Strategies

Welcome to Trader World’s Binary options trading strategies.

Binary Options can be a highly profitable way for you to trade. Options give you the flexibility to change your trading position at any time when external events/market movements/announcements take place.

You can select a binary option strategy that’s a little more daring, (if you’re a speculative trader), or more conservative (hedging).

Picking the right option strategy before you trade is absolutely crucial to gaining major rewards. And this section we will help you pick the right strategy for you.

Binary Options Trading Strategies;

Straddle option strategy

Risk Reversal option strategy

Butterfly option strategy

Hedging Option Strategy

Inside Bar Option strategy

Double red strategy

Momentum option strategy

Knock-on effect strategy

Straddle option strategy

A straddle is a binary option strategy. When you buy or sell an asset, it gives you the opportunity to make gains based on how much the price of that asset moves, whether that movement is up or down. When you buy, it’s called a ‘long straddle.’ When you sell, that’s a ‘short straddle.’

Risk Reversal option strategy

The goal of Risk Reversal is to put you in a free options position (where you won’t pay or receive money up front) in order to pursue leveraged speculation (stock hedging). Risk Reversal isn’t used so much in stock trading but is highly popular in commodities and forex trading, largely due to its hedging capabilities.

Butterfly option strategy

The Butterfly Option Strategy is a neutral mix of both bear and bull spreads.

Four option contracts are used in butterfly spreads with the same expiration. The contracts offer a range of three different strike prices the strategy can make gains from. You sell two option contracts at the middle strike price, buy one at a higher strike price and another at a lower strike price. You can use both puts and calls on butterfly spreads.

Hedging Option Strategy

If you want a strategy to help you lock-in the profits you make from the stocks you’re trading, hedging is the right one for you.

When you’re trading you can never be completely sure you will finish in profit. But, through put and call choices, binary options hedging strategies give you the opportunity to take your gains at the current time, reducing any risks.

Inside Bar Option strategy

If the market is in a state of indecision or consolidation, the Inside Bar Strategy is the perfect choice.

An inside bar is a single bar, or a number of bars, which you will find are entirely inside the range of the bar, or bars, which have gone before. The inside bar strategy is ideal for you when an inside bar has occurred during a down or up trend.

Double red strategy

The Double Red strategy is very simple and works when the following setup occurs:

One red bar appears and a second red bar follows, closing the first bar and its wick.

You’ll often find after this happens there’s a little pull back on that third candle which gives you the opportunity to enter at a more favorable price. Or you might just want to trade right away once the two reds come up to make sure you don’t miss out.

Momentum option strategy

Momentum investing is a very simple strategy. You are looking to buy stocks that have enjoyed major returns over the last three months to a year, and to sell stocks that have done poorly over the same time frame. As the name suggests, it’s all about momentum.

Knock-on effect strategy

The Knock-on Effect Strategy is highly popular with skilled traders as it utilities tactics they can apply to every asset.

If you follow the news you can see how a move in one asset impacts another. So if you see a major shift in the day’s market you invest in a Call or Put option accordingly.