TradeSmarter Launches “TS2”, an Upgraded B2B Platform for Binary Options Trading

New customizations, API, highlighted in next-generation platform release.

TradeSmarter Holdings is proud to announce the inauguration of its next-generation Binary Options Trading platform, TS2 (TradeSmarter Platform, Version 2). CTO Ron O’reilly said that TS2 was re-tooled with an emphasis on flexibility. He explained that in order to extend TS2 for individual customer needs, his team developed an API for advanced integration.

“The API that we’re launching will provide our partners with the ability to create their own front-end for the trading platform, using their own brand and theme,” O’reilly explained. “This will empower them to implement a customized look and feel for their customers, while we, at TradeSmarter, do the heavy lifting as it regards the technology and future scalability. The API is cross-platform, so partners will be able use it for building social web applications, Flash applications, mobile applications, or even traditional desktop applications.”

TradeSmarter has also opted to concentrate on expanding into international markets, by offering the most language and customization options in the business. TS2 currently supports 11 languages, with more to be added by fourth quarter 2010. To further support the expanding international customer base, TS2 also supports 56 trading assets, including currency pairs, commodities, popular international stocks and stock indices.

With the new technology offered by TS2, MarketPunter, a regulated Australian operator, in conjunction with TradeSmarter, is now offering a one-stop shop for customers who wish to set up their own white label binary options trading site with their own language and currency localization preferences.

TradeSmarter has also teamed up with the TS2-powered StartOptions to explore other kinds of partnerships as well. Through StartOptions Partners TradeSmarter is now offering IB’s and affiliates very competitive incentives to introduce traders to binary options.

“Through our partners, the platform can offer the fastest time-to-market in the industry,” explained CEO Jonathan Leon. “TS2 is a fully inclusive turnkey solution with very quick setup and deployment . White Labels and IB’s start from day one with a complete system, ready to roll, all they need to add is their own customizations.”

Leon added that anyone could take TS2 for a test drive at Tradesmarter.com. Users can make a demo account on the site, and trade real binary options, albeit with play money.

For more information about TS2, potential customers can visit TradeSmarterHoldings.com.

About TradeSmarter Holdings
TradeSmarterHoldings.com™ is a privately held company established in 2008 by international professionals from the financial and Internet industries, looking to build a next generation platform for simplified financial trading to allow anyone to trade in multiple markets, 24 hours a day. With an emphasis on rethinking binary options, TradeSmarter Holdings seeks to increase its customer base into new regions, adding additional languages and base currencies and providing new ways of thinking about online trading for novice users.

Binary Options Daily Review July 28, 2010

SPOTLIGHT

Gold falls to 3 month lows

Gold futures settled at a three-month low Tuesday, routed as they slid below a key support level early in the trading session and a wave of selling ensued.

U.S. stocks down on Tuesday

Strong earnings from DuPont helped drive the Dow Jones Industrial Average higher Tuesday, but the Standard & Poor’s 500 fell as a drop in consumer confidence weighed on consumer-sensitive stocks including Home Depot and McDonald’s.

Euro down vs. Yen

The euro edged lower against the yen as overnight gains to a more than two-month high encouraged Japanese exporters to sell in order to lock in profits. Further declines in the risk-sensitive euro are likely to be short-lived, as rising Asian shares are supporting sentiment toward the currency.

Dollar moves higher

The U.S. dollar advanced on Tuesday, gaining 1% against the Japanese yen and pushing the euro back under $1.30, after a report showed U.S. consumer confidence fell more than many anticipated, pressuring equities lower and reducing investors’ appetite for risky assets.

Oil falls 2%

Oil prices fell nearly 2% Tuesday as stocks wavered between gains and losses and selling momentum took over after the day’s two major pieces of macroeconomic news disappointed investors.

Binary Options Daily Review July 23, 2010

SPOTLIGHT:

U.S. stocks rally on earnings

U.S. stocks notched their best session in more than two weeks Thursday after a broad group of companies topped earnings estimates and raised their forecasts, and after investors got a breath of optimism from U.S. and European economic data.

U.S. dollar fell on Thursday

The U.S. dollar fell Thursday, losing ground against the euro and other major currencies as U.S. corporate and housing reports supported equities and reduced demand for the perceived safety of the greenback.

Gold made a comeback on Thursday

Gold staged a comeback Thursday, posting gains after bottom fishers came in to snap up the metal at bargain prices and as other commodities rallied on enthusiasm about U.S. corporate earnings.

Oil rallies to 3-week high
Crude climbs nearly 4% to top $79 a barrel as global demand view turns more bullish.

Binary Options Gameplan – 22-07-10: USD/JPY very Bearish…

The USD/JPY currency pair is forming a formidable inverse cup-and-handle chart pattern (indicated in circles on the daily chart below of the USD/JPY). Resistance is as 86.000 past which much lower prices are possible. Those of us who follow the dollar index are aware of dollar weakness against other currencies as well. This could lead to excellent Binary Option Put trades.

MetaTrader as Binary Options Trader Tool

Forex day trading is an occupation that never rests. A Forex day trader must constantly find the best tools, best broker, best execution time, best spread, best commissions, and on and on. Because tools, commissions, brokers, are always competing and improving, a Forex day trader finds himself occupied with testing software and opening accounts. All this is very time consuming and our time is better used for trading.

One of the best investments that a Forex trader can make is to use generic tools. These are tools that are not bound to one broker, so they can connect to many possible brokers. One such trading tool is MetaTrader. MetaTrader is one of a small handful of trading platforms that can perform all of the tasks that a Forex trader faces, without being tied to one broker. The big deal about this is that a trader that has spent the good part of a month tweaking and configuring MetaTrader (or any other generic platform), and then decides to change brokers, can still use the same MetaTrader without making any changes to the platform. Any trader who has had to switch brokers and then learn and configure a new trading platform knows how time consuming this can be. Worst of all its distracting. How many trading days did you lose switching to your last platform, until you had everything just the way you like it?

The best example for how cool this aspect of MetaTrader is, lets take a real hot topic these days: Binary Options Binary Options are quickly becoming the latest buzz-word in the Forex community. The main reasons are that within a few minutes you can make 65%-80% profit with a very small trading account (as little as $100 at www.startoptions.com for example). Also your risk is automatically included within the trade, so there is no need to calculate and manage stop orders to manage your risk. That’s why Binary Options are becoming to popular. Currently the only way to trade Binary Options is via web-based trading sites like www.startoptions.com or www.tradesmarter.com

So that’s yet another advantage of MetaTrader: Binary Options. Trading will never be the same again

World Stocks Up After Greece Asks For Bailout

World stock markets rose Monday as fears of a Greek debt default eased following last week’s request by the country to tap a rescue package from its 15 partners in the eurozone and the International Monetary Fund.

Rate decisions in the US, Japan and New Zealand, and the first GDP release from the US for 2010 are the highlights of this week, which begins slowly and then explodes. Will the dollar index break to a one year high?

Greek hopes turned into worries once again, as more credit downgrades for Greece were released and the talks of a possible default became louder. This story continues to accompany us, as well as the indicators.
This market review was brought to your by our partner: ForexCrunch.com

1. American CB Consumer Confidence: Published on Tuesday at 14:00 GMT. This broad survey of 5,000 households had a big dip in February but recovered quickly in March and reached 52.5 points. It’s now expected to take one step higher and rise to 54.2 points. EUR/USD is quite sensitive to this release.

2. Ben Bernanke talks: Starts speaking before the National Commission on Fiscal Responsibility and Reform on Tuesday at 14:00 GMT. In this official public appearance, Bernanke will definitely move the markets. He will testify on the challenge of achieving fiscal sustainability and will comment about the economy.

3. Australian CPI: Published on Wednesday at 1:30 GMT. Australia published its consumer prices only once every quarter, making this event an important release – an important indicator towards the next rate decision. After rising by 0.5% in Q4 of 2009, an acceleration is expected this time – 0.9%. A rise above 1% might push the Stevens to another rate hike. He seems reluctant to make another move soon.

4. American rate decision: Published on Wednesday at 18:15 GMT. Ben Bernanke isn’t expected to make any surprises with the Federal Funds Rate – it’s expected to remain unchanged at a maximum level of 0.25%. Maybe the discount rate will be mentioned. As usual, the FOMC Statement will be closely watched – every change in the wording might have hints, especially the clause about holding interest rates at a low level for an extended period of time.

5. New Zealand rate decision: Published on Wednesday at 21:00 GMT. New Zealand didn’t follow Australia with a move on the rates, and isn’t expected to move them now as well. The Official Cash Rate is expected to stay at 2.5%. Given the unconvincing rise in prices and weak retail sales, this won’t happen soon. The RBNZ Rate Statement that accompanies the rate decision will have a strong impact on the currency, especially if the economic forecast is updated.

6. American Unemployment Claims: Published on Thursday at 12:30 GMT. After rising to alarming levels, last week’s numbers were back to normal, at 456K. This time, a drop down to 440K is predicted. A break under 430K is necessary for seeing serious growth in the job market. Note that this is the best indicator for the Non-Farm Payrolls. Up to now, jobless claims indicate that no fireworks will be seen at the next NFP.

7. Japanese rate decision: Published on Friday morning. Japan’s Overnight Call Rate won’t move from 0.1%, not in the near future. The focus will be on the easing steps that the BOJ will make, and on the updated economic forecasts. Japan declared a war on deflation and could take more steps to stimulate the economy and move prices. Note that the Tokyo Core CPI, the best inflation indicator, is published just before the rate decision and will probably show an annual drop of 2% in prices, worse than previous months.

8. Swiss KOF Economic Barometer: Published on Friday at 9:30 GMT. This important Swiss indicator, based on 12 basic ones, is a good reflection of the Swiss economy, and its moves go hand in hand with the Swissy’s strength. After rising to 1.93 points, a rise to 1.99 is predicted this time, the highest since December 2007.

9. European Unemployment Rate: Published on Friday at 9:00 GMT. The European unemployment rate and flash CPI are published together. Unemployment is flirting around 10% for a few months. This is a big burden on Europe, and prevents Trichet from moving the rates, despite improvements various surveys.

10. European Flash CPI: On the other hand, inflation is slowly picking up. The CPI Flash Estimate is expected to show an annual rise of 1.4% in prices, exactly like last month and the highest level since the end of 2008. German PPI unexpectedly leaped last week. A rise above 1.5% will be problematic for Trichet – fighting inflation with higher rates will endanger the fragile recovery.

11. Canadian GDP: Published on Friday at 12:30 GMT. Canada’s monthly GDP is expected to rise by 0.5% in February, slightly lower than the 0.6% in January, but still in the same good rate as in Q4. Another nice month of growth will support the Canadian dollar in its battle on parity, which is still going on. GDP helped the loonie last month, and after the weak CPI and retail sales, it’ll sure need another boost.

12. American Advance GDP: Published on Friday at 12:30 GMT. After a very strong fourth quarter, that wasn’t accompanied with the same recovery in jobs, economists expect Q1 to show slower growth – an annual rate of 3.4%. Note that these expectations aren’t low, and that exceeding them will be a big boost for the dollar.

Binary Options Trading by StartOptions.com

Will the EUR/USD go up or down?

The EUR/USD pair gapped enormously today on the news of the European Union bailout of Greece announced over the weekend. This powerful move broke through a very significant 4 month descending line of resistance and can only indicate further gains to the EUR/USD. Expect strong volume for this currency pair with important economic events from the U.S. throughout the week. Don’t miss out on this opportunity to make quick gains on the EUR/USD using Binary Options trading.

Binary Options Strategy

binary options strategy

Several informative articles about Binary Options (also called Digital Options) have been posted at our blog . There you can find intermediate to advanced strategies for trading Binary Options. However, if you are new to Binary Options and want to learn more binary options strategies, this is post for you.

So what are Binary Options? Binary Options allow you to enter the trading world and to trade virtually any financial instrument (commodities, stocks, even Forex), all without any prior knowledge of trading. How is this possible? By greatly simplifying all aspects of trading, from opening an account, to funding your account by credit card, to execution and closing your positions. Nothing could be more simple. Binary Options are all about simplicity. The principle of trading Binary Options is based on choosing between 2 and only 2 possible outcomes. All other aspects of trading are taken care of for you. For example: if I choose to trade Google using Binary Options at www.tradesmarter.com, I simply need to choose whether Google’s price will end above or below the current price at the end of the hour. That’s it. As soon as I make that choice, all other aspects of trading are taken care of. Expiration of my Binary Option (closing my trade) at the end of the hour is automatic. If I chose correctly, lets say I decided that Google will end the hour above the current price and I was right, I will gain 70%. That’s unbelievable, considering that within literally minutes I can make hundreds of dollars, with my chances of succeeding being at least 50%. Certainly any knowledge of how Google behaves will allow me to increase my chances of success to greatly higher than 50%.

Many good binary options trading strategies have been posted at www.tradesmarter.com, however here is a nice and easy trading strategy to start you off. Have a look at Google’s trading history (you can use Yahoo Finance’s charts and open a daily chart of Google). When Google’s price crosses higher than yesterday’s high, often trading volume on Google will push the price higher. So a very simple way to start trading Binary Options is to place a ‘Call’ trade as Google’s price crosses yesterday’s high, indicating that you believe that the price at the end of the hour will end higher than the current price. If you were right at the end of the hour, your account will be automatically credited with 70% gain.

So as you can see from the example above, the best long term approach to trading Binary Options is to increase your chances of winning above the basic 50% chance. This can be generally achieved by using your preferred trading strategy, such as the one offered above, or other more advanced strategies at www.tradesmarter.com.

TradeSmarter.com Market Weekly Outlook – January 25-29

A busy week is ahead of us: rate decision in the US, Japan and New Zealand and GDP releases from the US, UK and Canada are part of an eventful week. Will we see more dollar strength? Here’s an outlook for the last week of January.

Beginning on Wednesday, the World Economic Forum meets in Davos, Switzerland. In their 4-day annual meetings, many central bankers, senior politicians and business leaders from all over the world chit-chat with reporters and also make official and moving statements. Their sporadic comments can shake the markets during most of the week.

Monday, January 25th: Australian PPI provides a strong start to the week, as this is a quarterly figure that has a strong impact on the Aussie.

American Existing Home Sales are expected to post a big drop after two strong months, and fall to 6.04 million.

Tuesday, January 26th: The Bank of Japan makes a rate decision. While the Overnight Call Rate isn’t expected to move from 0.1%, but the Monetary Policy Statement could sure shake the Yen, especially if economic forecasts are changed.

German Ifo Business Climate is an important survey for the Euro. It’s expected to continue the steady rising trend and edge up to 95.3 points. Last week’s survey, from ZEW, was bad and sent the Euro down.

Britain probably finished the recession. Prelim GDP for Q1 is expected to show growth of 0.4%. The unofficial number from NIESR talked about 0.3% growth, and they are usually correct, so there’s a good reason to be optimistic. Right after the release, Mervyn King will be speaking.

Last week King weighed on the Pound. A volatile time for the Pound.

In the US, the year-over-year S&P/CS Composite-20 HPI is expected to show a smaller drop in the prices of homes, 4.9%. The more important figure is the CB Consumer Confidence, that recovered from a big fall, and is now expected to climb to 53.7 points.

Wednesday, January 27th: Australian CPI is a quarterly release and has a strong impact on policymakers. After a modest rise of 0.1%, Q4 is expected to show a rise of 0.4%. A stronger rise is necessary to push the Aussie higher.

American New Home Sales are expected to recover from last month’s big fall, and rise to 372K. This will be a warmup for the big event.

Bern Bernanke is expected to leave the interest rate unchanged. The Federal Funds Rate will probably stay at a maximum level of 0.25%, and traders will focus on the usually confusing FOMC Statement. Last month, it took the market 6 hours to digest the statement, which seemed balanced at first. As they focused on the upside of the statement, cautious signs of recovery, the dollar rose. But the message sure was confusing.

Also in New Zealand we have a rate decision. The hot air came out of the balloon with low CPI in New Zealand and China’s tightening measures. So, the Official Cash Rate will probably remain unchanged at 2.5%. Hints for future policy will be provided in the RBNZ Rate Statement.

Thursday, January 28th: American Durable Goods Orders are expected to jump by 2.1% after remaining almost unchanged last month. Core Durable Goods Orders, no less important, are expected to do the opposite and rise by 0.4% after a leap last month.

Unemployment Claims that disappointed last week, are predicted to go back down to 452K.

In New Zealand, both Building Consents and Trade Balance will impact the kiwi, with the latter expected to show a smaller deficit this time.

Near the end of the day, Japan will be releasing Household Spending which is expected to rise and Tokyo Core CPI which is still expected to show an annual drop in prices – 1.8%.

Friday, January 29th: European Unemployment Rate is expected to be bad once again. After reaching 10% last month, it’s predicted to rise to 10.1%.

In Switzerland, the KOF Economic Barometer will move the Swissy.

Canada releases its monthly GDP, which is expected to show a 0.3% growth, better than the previous month. Last week’s rate decision hurt the loonie. USD/CAD will shake during this time, especially with the next release.

American Advance GDP for Q4 holds high expectations: an annual growth rate of 4.6%. After exiting recession in Q3 with a 2.2% growth rate, things are expected to get better in Q4. This release will shake the markets.

Chicago PMI is predicted to post a small drop, and the Revised UoM Consumer Sentiment is expected to be revised to the upside. Both events will be overshadowed by the Advance GDP release.

Market Weekly Outlook was brought to you by our partner ForexCrunch.com

Disclaimer: Binary Options Trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose.

TradeSmarter Moves to 24-hour Trading Day

We are pleased to announce that as of January 12, 2010 TradeSmarter has extended trading hours to offer a 24-hour trading day. TradeSmarter will now be open from 11:00 pm GMT on Sunday to market close on Friday. By extending trading hours, our members now have the opportunity to trade most of our currency, commodity and stocks overnight when trading was previously unavailable.

In addition, a 24-hour trading day is now offered by our partner StartOptions.com who offers real money trading.

If you have any questions, our customer service team will be happy to assist you. Please e-mail us at: support@tradesmarter.com

Sincerely,
TradeSmarter Team

http://www.TradeSmarter.com

TradeSmarter welcomes a new partner with a special Thanksgiving promotion

We hope you have enjoyed trading your demo account on TradeSmarter. If you’re interested in opening a real money account, register on StartOptions.com and you will receive a free $100 bonus on your first deposit.

StartOptions is a new binary options trading website that uses TradeSmarter’s platform that is open to everyone.

Start trading Forex ( FX) binary digital options

When an investor would like to place a forex binary option trading he would take under consideration the following factors:

• Trade time
• Spot price
• Strike price
• Forex (FX) binary option price valuation time
• Expiration time

Comparison of binary options premium pricing among binary options firms

It’s highly recommendable that the binary options trader will choose the firm he’s working with according to several parameters, one of them is the option premium collected by the binary options brokerage. Usually there are great variation in the premiums paid as this investment product is relatively new and not liquid as more mature investment products such as CFD’s and Spread Betting.

The difference between: In the Money, At the Money, and Out of the Money

While placing an option trading, the main focus of the forex trader is on the current price of the underlying asset, in our case the real-time spot price.
The spot price that also can be referred as the currency price is called at the money strike price.
The forex trader can purchase a binary option; the strike price will be one of the following:

• In the money (ITM)
• At the money (ATM)
• Out the money (OTM)

In The Money (ITM)

As you already know, anything in the online trading reward is based on a gauge of risk and reward.

The trader has to choice a variety of strategies and risk and reward factors in order to match the best options strategy that will match his investment style and the risk level he’s willing to take.
Risk haters usually stick to in-the-money option positions while risk lovers are more attracted to out-of-the-money option positions. In case the trader purchased in-the-money option, the option will move in correlation with the underlying asset price (in our example the forex spot price). The main advantage of trading forex options in contrast to taking a fx spot position is that investor will pay only the premimum without any other risk, on the other hand the premium of in-the-money option is much higher

At The Money (ATM)

Describe when the options strike price is equal to the spot price, This will allow the investor to take a position which is really close to the market real price without paying the high premiums of In the money position.

Out the Money (OTM)

Trading out of the money options is extremely popular, the forex investor speculates on a scenario which is far from the real market price. The investor wishes for a sharp move that will cause his position will advance according to his prediction, to his strike price or hopefully will exceed his strike price and will become an in the money position.

Option Value vs. Time factor

By taking a forex option trade, the investor always see in his mind several dimensions that related to his predicted profitability and risk. The most important factors are:
1)The time factor-how much time is lest the option to expire
2)Volatility-which implicate the risk within the option position

The option is prices according to many factors which are reflected in the premium price.
The idea behind pricing options is so find cases in which an underlying asset is underpriced or overpriced because of factors that aren’t related to the market and can be used by the investor to take advantage to use this price arbitrage to make money as the market correlation is not systematic.

The Ins and Outs of Trying Out our Binary Options Full Demo Account

TradeSmarter is glad to announce that thousands of traders and investors have taken advantage of trading on our virtual platform.  Many Investors have had the opportunity to become familiar with our product and our user-friendly platform, as well as testing and improving trading strategies.

Our virtual money account operates exactly the same as a real account, enabling you to have the full binary options trading experience without risking real money. On a virtual account you can buy CALL, or buy PUT and trade the same way you would in the real account. Also you have access to your trading history, as well as all the tools and features of our trading platform.
Whilst binary options trading might sound complex it is in fact very straight forward.  We offer stock options, forex options and commodity options, all an investor has to do to trade is by simply choosing a direction of an option, as simple as Above (CALL) or Below (PUT). Once the option expires if the you chose the correct direction and settled ‘in the money’ your return will be 70-75%, if settles ‘out of the money’ you get 10% of your deposit returned.
So why spend your time with demo trading accounts?  Why not just jump right into it if it’s so simplistic?
Well, as with all trading there is high risk involved, arguably the pre-determined exposure to each trade reduces the risk however starting with the virtual trading is still the sensible option. Capitalize on this a virtual safe opportunity to test trading strategies and try out different options that work best for you. It’s much safer to learn when there is no real money and no risk. However it is still important to always treat your virtual account as if it is a real account, therefore when it is time to jump into the water your ready!
Are you a trading rockstar? come and show the world the trader in you- TradeSmarter.com

Resources:

Perfect your options trades for free with virtual trading by Steve Sarnoff

TradeSmarter announces new back-office features to its binary options platform.

TradeSmarter announces the deployment of ‘two’ new back-office features to be added to its binary options trading platform.
1. Change of Theme capabilities (similar to wordpress plugin)
2. Retention and Alert functionality

Change of Theme – Our new feature makes it very straight forward to configure aspects of a sites ‘look and feel’ without needing to edit any code. Check out this screen shot of the options panel.

“Simple as changing a panel”

Retention & Alert Functionality – we have implemented a messaging function, enabling  admin to send messages to end-users as a group or individually. For example “Hey Joe, we credited your account by $50 bonus”. This Retention Module helps site owner alert and notfiy users in real time.

Financial Gaming is coming to EiG? Look for Us!

Members of team are already in Copenhagen,  European iGaming Congress and Expo (EIG), from September 15th until September 17th. We are going there for some meetings and will be happy to meet you there. Feel free to request time to meet by simply dropping us an email to adam@tradesmarter.com or contactus@tradesmarter.com

Short Video that explains what we do :)

TradeSmarter.com Launches a Binary Options Wiki

TradeSmarter.com launches today a comperhansive knowledge base that covers the binary options trading market.
Tradesmarter’s binary options wiki includes all the relveant information a trader should know in order to trade binary options sucessfully.

TradeSmarter.com is a technology and services provider of binary options trading solutions. TradeSmarter Binary Options Platform enables online traders to speculate easily on a wide range of instruments within the financial markets such as binary stock options, binary commodities options, binary forex options and binary indices options . TradeSmarter Solutions allow Partners to deploy sophisticated financial components within any new or existing online environment, customized with the look and feel of their own brand. Now platform is live at
TradeSmarter.com – click here to trade options

Binary Options Trading Strategies

Binary options empower the investor with a flexible trading tool that can help him react to any change happening in the market. There are five type of binaries which fall under the following categories:

Binary No Touch (also called “Lock Out”)

a binary option that gives an investor a payout at expiry only if the spot rate has NOT traded at or beyond the touch-barrier before expiry. Only two outcomes are possible with this type of option:

1.    the barrier is breached and the investor collects the full payout agreed upon at theoutset of the contract
2.    the barrier is not breached and the investor losses most of his initial investment
If a trader predicts that an underlying asset is about to bump into a strong resistance or support level,
than the one touch option let speculate that the price won’t fall below a certain support level or alternatively, manage to break out a certain resistance level.
This options trading strategy is usually deployed according to technical analysis assumption such as: Support and Resistance level, Fibonacci analysis etc.

Binary Double No Touch (also called “Range Binary” or “Double Lock Out”)

Is a binary option that pays the investor the predetermined payout at expiry if the price of

the underlying asset does not reach or surpass one of the two predetermined barrier levels.

Only two outcomes are possible with this type of binary option:
1.    The barrier is breached and the investor collects the full payout agreed upon at the outset of the contract.
2.    The barrier is not breached and the trader losing most of his initial investment.

This strategy is aimed to speculate whether an underlying asset predicted to move within a predetermined price range.
In comparison to Strangle options strategy, double no touch don’t exposed to theoretical, unlimited risk of a strong price action in the money.

The risk is limited and predetermined.

Example:
Let’s say the EUR/USD is traded now at the 1.4253 price level,

If you buy a daily ‘Double no touch’ option with 1.43 as the upside barrier level and 1.4205 as the downside barrier level and by the end of the day the EUR/USD moved in a narrow range of 1.4206-1.4252 then this ‘Double

no touch’ binary option will be ‘in-the-money’ paying the full predetermined payout to the trader.

Double One Touch

If a specific underlying asset is predicted to break out a specific price level, with no certainty of which di

rection it will be that the Double one touch strategy is used.

The double one touch binary option will provide the predetermined payout if an underlying asset broke out either one of the directions.
The double one touch often used to speculate a price breakout after a price consolidation or upon economic data release such as earnings reports or macro economic data.

Example:
Let’s say the EUR/USD is traded now at the 1.4253 price level, If you buy a daily ‘Double one touch’ binary option with 1.43 as the upside barrier level and 1.4205 as the downside barrier leveland by the end of the day the EUR/USD surpassed the 1.43 level, or alternatively breached the 1.4205 level than this binary option will be ‘in-the-money’ paying the full predetermined payout to the trader.The following illustration shows a double one touch binary that surpassed the high barrier with an uptrend breakout.

One-Touch Options (also called “Lock In” or “Touch Digital”)

The one-touch binary option gives an investor a predetermined payout once the price of the underlying as

set reaches or surpasses a predetermined price level.
There are two possible outcomes for the ‘one-touch’ binary option:

1) The predetermined price level is breached, the investor receive the payout agreed.
2) The price level is not breached and the investor losses some of his investment

When an underlying asset is expected to move sharply to a specific direction based on solid assumption than the ‘one touch’ binary option shall be used. When buying a one touch binary option, the trader anticipates either a breakout with taking under consideration the breakout strength,as the one touch options trading strategy will be in the money only if it ‘touched’ the predetermined price level.

Binary options (also called “Digital Options’)

Binary options are one of the simplest and inexpensive investment products out there.
If you believe that the EUR/USD will climb above the current price (1.4253 for example), at the end of the selected duration (within 1 day for example) that a binary option is a great choice for you, offering a predetermined reward and risk.

Hedging a Forex News Risk Event Using Binary Options

In the past few days I have been writing all about how excited I am about my Forex hedging strategies using Forex binary options. If you have read my previous posts on this blog, then by now you are familiar with how to hedge a breakout of a Forex instrument using binary options. But just to recap, binary options hedging offers a better alternative to traditional stop-losses. The reason they protect you better than stop-losses is that stop-losses lose money when they are hit and a binary option hedge does not.

Its that simple, The principal behind this is that binary option hedges shift the risk from below the breakout point to above it. The most attractive feature of this risk-shift is that trader momentum works in your favor above the breakout point. Have a look at my previous posts if this is not clear.
Today I will talk about another binary option hedging strategy. This strategy is similar to the strategy we have been discussing. The only difference is that the timing of both your Forex trade and your binary option hedge will be based on a a rally following a Forex news risk event, rather than a breakout of a resistance point.
In this example, today Great Britain released an important news data, the CPI y/y. Immediately after the news release, which attested to a better than expected rise in Great Britain’s CPI, the GBPUSD rallied as expected. Just after buying a long position on the GBPUSD, I placed a binary option hedge on www.Tradesmarter.com ’s binary option trading site. As in my previous posts about hedging, this hedge was a position opposite to the Forex position that I was holding, in other words a $100 PUT GBPUSD binary option trade. What this effectively achieved was to provide me with a $70 buffer zone below the breakout point. Anywhere within that buffer zone, within a $70 loss on my long Forex position, I would have been protected against a breakout failure without losing any money. A stop-loss, on the other hand, would have resulted in losses in case it was hit after a breakout failure or a shake-out (a minor test of the breakout point).
We have been talking about trader momentum as an important element in making this strategy successful. As you can see in the image and in examples in my previous posts, as long as the breakout failure is minor, selling momentum will be minor in my hedged buffer zone, just below the breakout point. As soon as the breakout re-occurs after testing the breakout point, trader buying momentum will work in our favor by quickly providing us the gains we need to cover the cost of the binary option hedge, $85.
In short, trader momentum works in a highly correlated nature with binary option hedging. This makes binary option hedging a more successful strategy for protecting against minor breakout failures than a traditional stop-loss.

Go to trade options

Hedging breakouts of the USDCHF and AUDUSD by using forex binary options

In my previous posts I outlined and gave examples of how to use binary options trading as a vehicle to hedge Forex trading. The links to these previous posts can be found below, and they are very useful if you still find this technique confusing, or if you just want to delve deeper into the theory. But just as a reminder, one of the many ways that binary options trading can be useful is as a hedging vehicle. Rather than use a traditional stop-loss to protect against loss, I have been using binary options. The reason that binary options can be more attractive than stop-losses, is that stop-losses are risky below the breakout point, assuming that’s where you are placing them, and generate losses when they are hit.

On the other hand, using a binary option hedge, which is simply a binary option position placed to win in the opposite direction of our Forex trade, we gain better protection than with stop-loss because if our Forex trade fails than our binary options wins, thus fully hedging our Forex position and ultimately leading to zero losses if our Forex trade fails. Thus the risk is shifted from below the breakout point, in the area between the breakout point and the stop-loss, to above the breakout point, in the area between the breakout point and the cost of the binary option. Again, have a look at my previous posts if this is still confusing.

Today I used binary option hedging to protect against breakout failure of the USDCHF and AUDUSD. As you can see in the image below, these instruments were in full swing today. As usual, within the hour after breakout both instruments tested their breakout points. While placing a traditional stop-loss may succeed if placed exactly right, it is nearly impossible to guess how far below a breakout point a test may descend, often shaking us out of our position before breaking out again shortly afterwards. This is where a binary option hedge is useful. Immediately after placing my Forex trades at the breakout points, I placed $100 binary option hedges (a trade of a binary option in the opposite direction of my Forex trade) on TradeSmarter.com’s binary option trading site. As a result, I was completely covered up to $70 of losses when the breakouts were tested. Had the breakouts truly failed I would have exited with zero losses thanks to the binary option wins, rather than losing money had I used traditional stop-losses. Since the breakouts succeeded after testing the breakout points, I became profitable as soon as I made more than $85 on my Forex positions ($85 is the amount lost when the binary option fails).

The strength of this hedging strategy relies on the properties of trader momentum. Since nearly all traders use stop-losses below the breakout points, a test of the breakout point is very risky below the breakout point when more and more stops get hit and selling momentum builds. The same is true after the breakout test, when the breakout occurs again. At this point most traders are aware that the breakout did not fail and re-enter with greater momentum. This helps us quickly recoop the $85 loss of the binary option. You can see this in the image provided, as well as in my previous posts using the GBPUSD.
In conclusion, by using binary option hedging we shift the risk from below the breakout to above. This allows us to take advantage of trader momentum which works against us when using a stop-loss and works for us when using binary option hedging.
For more information on how this works see
http://tradesmarter.com/2009/06/hedging-a-breakout-of-the-gbpusd-using-binary-options-trading/
and
http://tradesmarter.com/2009/06/trading-binary-options-as-a-hedging-strategy-for-forex-trading/

Go to trade options

Next Page »