Wednesday, June 8, 2011

Popular Binary Option Trading Strategy Types

Binary options have become increasing popular as a trading vehicle for those interested in speculating on forex rates, commodity prices, stock prices and market indexes.

Although usually traded from the long side, binary options can be combined into several option trading strategy types that are similar to those described in just about any option trading guide that focuses on strategies involving regular or “vanilla” options.

The primary difference seen with binary options is that they have a fixed payout at expiration, rather than the time and price sensitive payout that is characteristic of vanilla options.

Binary options also tend to be traded with considerably shorter maturities than vanilla options, often expiring one week to less than one hour from initiation of the binary option position — depending on what the binary option brokerage used offers.

The following sections will cover some of the more common binary option trading strategy types employed by retail traders with access to a binary options broker.

Purchased Binary Call Option Trading Strategy

This option trading strategy involves paying an up front premium to purchase a binary call option that will pay out a fixed amount if the underlying market is above its strike price at expiration.

Traders might use this bullish option trading strategy if they thought the market might rise by expiration, but they did not wish to take the added risk of stop loss sell order slippage or being triggered on a stop loss sell order before ultimately being proved correct on the market’s anticipated upward direction.

Purchased Binary Put Option Trading Strategy

This option trading strategy involves buying a binary put option for an up front premium that will pay out a predetermined amount if the underlying’s market price is below the option’s strike price at its expiration time.

Traders could employ this bearish option trading strategy if they anticipated that the market could fall by its expiration time, and they wanted to avoid the added risk of stop loss buy order slippage or being triggered on a stop loss buy order before the market eventually moved in the anticipated downward direction.

Purchased Binary Straddle Option Trading Strategy

This option trading strategy involves purchasing both a binary put option and a binary call option at the same strike price that is usually close to at the money in return for an up front premium. These binary options will each pay out a fixed amount if the underlying market is better than their identical strike price at expiration, but they will both not pay out at the same time.

Traders might employ this usually initially neutral option trading strategy if they expected the underlying market to move significantly by expiration, but they were not sure in what direction it might go.

In addition, they might buy a straddle made up of binary options if they did not want to take the extra risk of slippage on stop loss orders or being triggered on stop loss orders after initiating a position in a particularly volatile market.

Purchased Binary Strangle Option Trading Strategy

This option trading strategy involves paying an up front premium to purchase both a binary call option and a binary put option at different strike prices that are usually a similar amount out of the money. Each leg of the strangle will pay out a fixed amount if the underlying market is better than their strike price at expiration, but both legs will not pay out at the same time.

Traders might use this usually initially neutral option trading strategy if they thought the underlying market might move substantially by expiration, but they did not know in which direction.

Furthermore, they might use a strangle consisting of binary options if they did not wish to take the added risk of stop loss order slippage or being triggered on a stop loss order after opening a position in an especially fast market.

For More Information Please Visit :


  1. Hi,

    Hope this email finds you well.

    I'm Xiang from Sirens Media Sdn Bhd, a Malaysia Social Media Company.

    I'm interested to propose your blog to the client for advertorials.

    If you do interested in it, could you kindly send me a screen shot of your blog unique visitor and unique pageview stat ( a week ) for reference and proposal purposes?


    Sirens Media Sdn Bhd
    Email :
    Email :
    Website :
    Twitter : @xiangcool

  2. Hello, I'm running a binary options blog as well. Probably we could exchange link via blog posts, I'll write a blog post and you'll post it on your blog, you'll do the same as well. It could increase our ranking significantly. Please contact me at


  3. Today binary options is best investment option in financial market. this investment have lower risk and but it can gives you huge money.

  4. I have dabbled with binary options trading for some time now and I should say that one strategy that I always adhere to is keeping my emotions in check, which is a sound advice in every business investment, if I may say so. When I see that market prices do not go the way as I have expected, I try my best to have a presence of mind of doing exactly what I have set out to do: making a profit. Some may throw logic and financial reasoning out the window when temperaments are high. I find binary option broker optionbit helpful as a guide in binary options trading and have not looked the other way when searching for sites to use as a reference.

  5. Binary option is easiest and the most popular financial tool that is growing at a rapid rate. You have explained the overall concept in an easy way that is quick to understand.
    digital options

  6. Nice tips you got for us, but I want to know your insight regarding the tip that I was able to get through binary options broker review . I actually wanted to try binary options but I still feel that I don’t have enough knowledge. Can you give me sites where I could practice trading for free?

  7. If you’re a beginner in binary trading , you will be lured to buy binary options and stocks of companies that are popular in the market. Ofcourse it’s not a mistake, but you need to know that there are better opportunities that are present, such as the stocks of small but fast growing companies that have a vast potential for development.

  8. Binary options has turned into a route for numerous merchants to profit, rapidly and effortlessly, at times separated from their customary vocations.

    Binary Trading Program

  9. The arrangement of creation and use of vital trusts of money assets for guarantying communist enlarged further generation speak to precisely the funds of the communist society.
    Best Binary Options Trading

  10. Thanks for sharing that information with us really informative.. Keep posting and I'm waiting for your
    upcoming response..Thanks
    Best Binary Options Trading

  11. Thanks for picking out the time to discuss this, I feel great about it and love studying more on this topic. It is extremely helpful for me. Thanks for such a valuable help again.

  12. Admiring the time and effort you put into your blog and detailed information you offer!.. United Arab Emirates brokerage firms

  13. The Litecoin Foundation has actually partnered with MeconCash in order to add support for Litecoin (LTC) to the M.Pay payments platform. The support would certainly see crypto individuals take out LTC utilizing Korean Won (KRW) at greater than 13,000 Atm Machines in South Korea. The support will likewise allow users to have accessibility to quick cash in enhancement to being able to send out money from overseas to South Korea. Bitcoin bot

  14. Eyal Nachum is a fintech guru and a director at Bruc Bond. Eyal is the architect of the software that SMEs use to do cross-border payments.

  15. Bruc Bond endeavor to lead the financial sector with sustainability, customizable product offering, and open communication. At Bruc Bond we aim to make 21st century banking straightforward, simple, and transparent.

  16. Hello everyone on here my name is Fumo Sadiku living in Malindi City Kenyan I want to tell a little more about a good hearten man called Benjamin Breil Lee working with Le_meridian funding service as loan officer, Mr Benjamin Breil Lee helped me get a loan of 37,115,225.00 Shillings on my trying time trying to get back on my feet to raise my business I know there are some of you here who are in financial difficulties to talk to Mr Benjamin on what's app 1-989-394-3740 Or email his company E-Mail also with his personal E-mail on I'm so glad for what he did for me and for his Bank accountant as well Accountant Hernandez Lucas Thank you very much for your work well done.

  17. Usually I don’t read article on blogs, but I would like to say that this write-up very pressured me to check out and do it! Your writing style has been surprised me. Thank you, quite great article. Astrologer in New Jersey,
    Astrologer in Illinois,

  18. All thanks to Mr Anderson Carl for helping with my profits and making my fifth withdrawal possible. I'm here to share an amazing life changing opportunity with you. its called Bitcoin / Forex trading options. it is a highly lucrative business which can earn you as much as $2,570 in a week from an initial investment of just $200. I am living proof of this great business opportunity. If anyone is interested in trading on bitcoin or any cryptocurrency and want a successful trade without losing notify Mr Anderson Carl now on Whatsapp: +1(252)285-2093 Email: