Binary Options Daily News, – stay ahead of the markets

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Binary Options Economic News and the Week Ahead

SamTrader1

Active member

ECONOMIC NEWS

Stocks took a hit at the open after nonfarm payrolls rose by only 54,000 in May, the smallest increase for jobs since September 2020, according to the Labor Department. Analysts surveyed by Reuters had expected to see 150,000 jobs added in May after a gain of 244,000 jobs in April, an 11-month high.

MONDAY: Federal Reserve Chairman Bernanke speaks, Fed’s Plosser speaks, Fed’s Fisher speaks, Treasury STRIPS.

TUESDAY:
3-year Treasury note auction, consumer credit; Fed’s Dudley speaks, Fed’s Lockhart speaks; Amazon shareholder meeting.

WEDNESDAY: Weekly mortgage applications, McDonald’s sales data, quarterly services survey, oil inventories, 10-year Treasury note auction, Fed’s Beige Book; Fed’s Hoenig speaks; Caterpillar shareholder meeting.

THURSDAY: Bank of England announcement, European Central Bank announcement; international trade, jobless claims, wholesale trade, 30-year Treasury bond auction, money supply; Lubrizol shareholders vote on Berkshire takeover; Fed’s Plosser speaks, Fed’s Yellen speaks; earnings from National Semiconductor.

FRIDAY: Import & export prices, Treasury budget.

How to Trade Binary Options Around News Events

A short guide for trading binary options before, during and after economic announcements, IPO’s and company news as we understand

Economic and business events are where the action takes place, whether in forex or binary options. Volumes, emotions and tempers all rise together before rate decisions or a new company product is being unveiled. The main reason for this is that everyone gets a point of reference about the financial instrument involved. This causes a surge in confidence and in decision-making. The so-called “risk-on.”

With binary options there are several points to take into consideration before trading an event. First is the magnitude of the event – will it move the price enough to give a clear indication for the duration of your preferred option and will it give enough information about its direction? Second is the duration of the option that should be chosen – is this event going to have a long-lasting effect or will it cause short-term volatility before it simmers down?

Choosing between high/low and touch options is the next step. The former are the most popular in such cases, but this would definitely be the best time to use the touch (or one-touch depending on their availability with your preferred broker) options. Bare in mind that the levels for touch options usually vary for the times when there is an event.

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    BINARIUM

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  • BINOMO
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    Perfect For Experienced Traders!

The difference a piece of important news makes to the price is that it gives it momentum. The ripples are stronger right after the splash. With the binary options for five, 15, 30 and 60 minutes (not to mention the ones that last less than a minute) you can capture these waves right after they happen. This is among the strong points for such options, as well as the fact that events can give a strong indication of future movement which can also be taken advantage of with longer binary options.

There are also cons for trading these options. Even after a clear direction is established, there might be occasional deviations from the straightforward movement and some trades might fall within them with a duration that is too short. So selecting the entry point and length of the options is crucial, as well as good risk-reward ratio calculations.

Of course you can choose to go with a more proactive approach – trying to guess in advance if the event or announcement go your way and choose long-term options – daily, weekly and monthly – to be in line with research that you have made. There might be indications that a rate hike is imminent, or some leaked data shows a big change in the demand for oil, so you can trade on them if you believe the data or analyses. Only here, unlike forex, your possible gains and losses are predetermined.

Events offer rich possibilities to trade in binaries and the more available instruments there are, the more opportunities there will be. It is the simplest way of trading and can be done by simply looking at the price changing after the news breaks, but with some technical analyses it can have a higher success rate.

Trading Stocks

Trading stock binary options takes some understanding of how stocks behave in order to profit from it.

Stocks constitute one of the asset derivatives that can be traded on the binary options market. Usually, a trader will have access to trade hundreds of stocks, as brokers will list several stocks from the different stock exchanges across the world. A good spread will include stocks from the three American exchanges, the London stock exchange, and the stock exchanges from Germany, Spain, Switzerland, the Eurostoxx exchange (which contains stocks of companies in the Netherlands, Belgium, and other central European nations) as well as stocks from some selected middle East exchanges. This gives traders and unbelievable spectrum of stocks to change.

What Factors Should you Take into Account when Trading Stocks?

In order to trade stock binary options, traders must be conversant with the factors that cause movement in stock prices. Some of these factors are as follows:

1) Market sentiment: if there is a gloomy market sentiment and worry about the global economy, most investors will prefer to hold cash and will sell their stock holdings, leading to a fall in stock prices.

2) Earnings reports: A good or bad earnings report will cause a stock price to rise or fall respectively. What constitutes a good or bad earnings report? A company reporting a loss may look bad, but if the loss is less than a previous loss, this may be viewed in a positive light by investors, leading to increased demand and a rise in the price of this asset. Conversely, profits declared by a quoted company may not necessarily be viewed in good light, if the profits are less, or are viewed as an underperformance when compared with its peers for the period. The trader must have access to historical data to be able to use factors like earnings reports for stock binary options trading. Another limitation to the use of earnings in trading stock binary options is that they are seasonal and can only be used during the quarterly earnings season.

3) Mergers and Acquisitions: A merger or an acquisition is meant to improve the standing and competitiveness of the companies in question, and usually have a positive impact for the companies involved.

4) Government policies: these could have a positive or negative effect on stock prices. For instance, increasing import duties on raw materials for a particular industry could erode the profit margins of affected companies and negatively impact their ability to remain competitive against foreign goods. On the other hand, import duty waivers could enhance profitability of the same companies in question.

How to Trade Stock Binary Options

The first step is to identify in what direction the stock is likely to head after a news release affecting the share price of the company in question. From there, the trader is free to choose any binary options trade type to fit his trade profile. For instance, an earnings report can lead to a sustained response that lasts for many days. In such a situation, the trader can decide to trade the Touch/No Touch option, using an appropriate price barrier while taking into consideration any recent supports or resistance levels.

If there is a particularly strong news release that is likely to cause the share price of a company to spike in any direction, the trader can decide to trade any of the high-yield option varieties. For instance, the sudden announcement by the CEO of JP Morgan about the trading losses recently incurred on its positions is the kind of news release that can lead to a move so hard that it could breach the price barriers of the high-yield option types. It is ultimately up to the trader to determine what kind of trade will suit the news release he wants to trade.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!

  • BINOMO
    BINOMO

    Perfect For Experienced Traders!

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