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Each individual trader is unique. I have never encountered two traders who see market opportunities in exactly the same way.
Every individual trader see the market from his or her own perspective, and this is what creates the market in the end. In this article we will cover trading two specific instruments, the one-touch put and one-touch call, to profit using one one-touch options through combining two different views, that of market volatility and market direction. When trading this instrument, I use the binary platform at www. It offers one-touch puts and calls for a wide range of options, including my favorite, which is the Euro vs.
Currently the rate is about at the 1. Perhaps this large figure will spark a significant move in either direction. However, there is sure to be some kind of action at this level as the market decides whether it is at a resistance or support level. What can the trader do to capitalize on this situation? The answer is to sell the upside one-touch call. If this rate is at 1. So if the 1. The seller of a one-touch call in effect has a small amount of buffer that is built into his projection.
US dollar for not touching and touching the 1. So how is that worked out to know what the level should be? So how is the level calculated? We know the one-touch call price is double that of a vanilla binary call option or time and strike to expiry European. US dollar touching 1. However, one of the inputs that goes into their calculation can be challenged, which is the implied volatility level that is being assumed.
If optionFair believes that the implied volatility level is too high then the one-touch call should be sold since the one-touch level would be set too high. You have the choice or either cashing in immediately or running the one-touch call and hope the underlying bounces back past 1. There is more to binary options trading than just the Over and Under game. Assessing volatility is key to successful options trading.
It applies as much to binary options as it does to conventional options. Having good judgment on volatility, in addition to being able to assess market direction, provides you with the ideal springboard for very rewarding trades and profits. Your email address will not be published. Conclusion There is more to binary options trading than just the Over and Under game. Leave a Reply Cancel reply Your email address will not be published.