Binary Options Strategy for Stocks -

Binary Options Strategy for Stocks

Maybe the biggest advantage of binary options is the fact that those can be used like Forex, with the difference that you can trade stocks, metals and commodities with the same ease. In Forex, you had to create currencies of pairs based on your anticipation about the prices of the two currencies forming the pair. In Binary Options, you will have to trade pairs, but those pairs could be of stocks. Let’s see how the Binary Options Strategies can be applied for those stocks.

How Does This Binary Options Strategy Work ?

Let’s suppose that you want to buy the pair formed on Google and Microsoft stocks. The pair might be valued at 1.4, meaning that you need to pay 1.4 Google stocks to buy one Microsoft share. Microsoft announces that their financial results for the respective period are a lot better than initially anticipated. This means that the value of the Microsoft stocks would grow, and for the next month, you will need to pay 1.5 Google stocks to buy one share of Microsoft. Of course, the buyers would rush for those, and you can sell your stock for 1.5. Your profit is 0.1 Google stocks, which can be a serious sum sometimes.

This is only one of the simplest and most effective Binary Options Strategies for stocks. In currencies trading, anticipating the price on the market is usually made with technical analysis, and it is a matter of statistics and mathematics. In the case of stocks, the Binary Options Strategies must be based more on the fundamental analysis, meaning that the investor has to evaluate the health of one company compared with the other, and to anticipate the evolution of prices of those stocks, for the next period (one, three months or even one year).

The price of stocks for one company is determined by many factors, but the most important of them are:

  • when the company announces its financial results.
  • When the company is about to merge with another company, or to buy another company. In case the company of your interest decides to buy another smaller firm, the prices of your company would grow, but if a larger company decides to buy the firm that interests you, the value of stocks would grow.

Final Word About Your Binary Options Strategy

Besides this, the prices of stocks can be influenced by the decisions taken by the government of the country where the company activates, and by rumors in the market. This is why it is important to establish your trading strategy on a longer term, based on all those factors.

Super Binary Option Broker

One Response to “Binary Options Strategy for Stocks”

  1. william says:

    thanks for sharing good post. binary options is new exciting trading platform in the market today. traders always need deep knowledge to gain profit and minimize the loss. you have posted good strategy for trading stocks in binary options. help to increasing your knowledge and confidence.

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