Trading binary stocks options enables trader to easily speculate on stock prices, meaning with just entering a call trade traders can profit from rising stock prices and a put trade enable traders to profit from declining stock price avoid any brokers commission or fees.
Trading binary stocks is similar to trading binary options over any other financial instruments, however the underlying asset for the binary options is a stock of major company.
Advantages of Trading Binary Stocks Options
Trading stocks over a binary options platform offers couple of advantage to facilities trader not previously available with stock brokers.
- Number 1 advantage of trading stock binary is you don’t have to pay brokers fees and commission. These fees are huge for small investors.For example it cost you around $400 to buy one share of apple. The typical fees are $10 for executing buy order and $10 for closing a trade. So even if the share gain 2% ($8) a day which is huge move for apple share you still make a loss of $12. You need to buy least 20 shares worth $8,000 total to make a return of $120 and cover your brokers fees.
- Regular stock trading locks lots of investment to take profit from price appreciation. Whereas trading binary options traders can earn 75%-85% on their investment, so with small investment trader can magnify their gains, thus making it small investors friendly.
- All the variable needs to be correct in order to profit from regular stock trading, meaning the stock should appreciate by certain percentage to have reasonable profit on your investment. Whereas, in binary options the value of the stock needs to be just high (or low in case of call trade) even by a single point to profit from your trade.
How to trade Binary Stock Option
Binary options stock are traded just like binary options for any other underlying assets. Trading stock options is really simple and the entire process could be broken down to 4 steps:
- Select a stock you want to trade.Select a stock which you understand, each stock have different price dynamics so its important you restrict yourself to the stocks for which you have least some know how.
- Analyze the direction of the stock.Next you need to analyze which direction the stock is expected to move. You can use different analysis method to make a forecast including technical analysis, fundaments, news research, dividends and earning report and so on. If you believe the price of the stock will appreciate you will enter a call trade else if you anticipate the stock will lose its value enter a put trade to profit from declining stock.
- Select the appropriate timeframe for your forecast.Once you select the direction of the stock you need to set the appropriate time for your prediction to be correct. Let say if you believe the price of IBM Stock will be higher than current price at the end of the day, so you will select one trading day as the expiry.
- Finally set the stock options investment size.Finally you need to specify the risk you want take on the binary stock. Binary options have high profits and loss so you need to identify the best mix and set the position size accordingly. Binary platform enables to specify trade size starting from $1 up to $10,000.
The following image shows binary stocks options trade on a real trading platform.
Different Binary Stocks Available For Trading
Binary options trading platform offers most prominent and widely traded stocks. List of stocks offered by one broker might be different than another, so before selecting a broker check either the broker offers stock that you want to trade. Follow are the stocks available at typical binary options trading platform for trading.
|United States||ASIA PACIFIC||EUROPE|
Bank of America
Las Vegas Sands
|ANZ BankBHP BillitonCPIC GroupIndustrial BankMitsubishi
Ping An Insurance
|Akbank TurkAllianzBanco SantanderBarclaysBBVA
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