In this article I am going to discuss and explain you some hedging methods that you can try with Binary Options contracts. Hedging is a way to reduce the risk of your trades. This binary option chart is from GBPUSD currency pair. The general idea of this strategy is to create bounds for the same asset with two contracts.
A good trading period for straddle is when the price is moving inside a symmetric channel like this. There is not much volatility to create unpredictable situations.
So, look at the chart. We have a previous resistance and a previous support. When the price hit the resistance which the highest level for now we can take a put with 15 minutes expiry for example. After that the price is moving down and hit the previous support which is the lowest level for now. In this level we can take a call with the same expiry, 15 minutes. Five minutes ago we took a put in the support which expires in the money,too.
So, in the first scenario we have 2 ITM trades with a high reward. So, we have an ITM put and an OTM call. This means a very small loss for us. So, if a trader will create a good straddle the possible scenarios are a high reward or a very small loss. These strategies are mainly for binary options trading in an exchange and are about hedging the same or different assets.
GBPUSD and USDCHF are two currency pairs which usually moving opposite to one another. This is from GBPUSD currency pair. You can see that at Now, this USDCHF currency pair chart and you can see that the same time So, there are opportunities to trade this.
I usually open 2 trades one in GBPUSD and another one in USDCHF in Spread Betting or Spot Forex with the same direction.
You will win one of them for sure. For being profitable with this you should find the right time in which these two currency pairs give you a profit. For example in this chart we can open two sell orders. Even in first 10 minutes we will have profit because the downtrend in USDCHF is stronger than the uptrend in the beginning.
For doing this in Spot or in Spread Bets you must have a good margin in your account. These two pairs EURUSD and GBPUSD are moving in the same direction. You can hedge them in a binary options exchange.
How To Hedge Using Binary Options
The contracts are opening for example at We are buiyng a call contract for the one of them and a put contract for the other. After some minutes the market has moved to one direction up or down.
One of our contracts will ITM and the other OTM. You must be logged in to post a comment. Free Binary Options Charts Live Binary Charts For Free. Home Free MetaTrader Brokers Strategy Dont Trust Signals Forex Trading Vs Binary Trading Who Am I?
Binary Options Trading Hedging Methods In this article I am going to discuss and explain you some hedging methods that you can try with Binary Options contracts. Some more binary options hedging strategies These strategies are mainly for binary options trading in an exchange and are about hedging the same or different assets.
Hedging Strategy Binary Options Trading
Hedging EURUSD and GBPUSD These two pairs EURUSD and GBPUSD are moving in the same direction. Leave a Reply Click here to cancel reply.
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