Day Trading Digest

If you are day trading and looking for the highest return investments one often overlooked alternative is the binary options trade. In its simplest form the binary option pays out typically at least sixty percent return on investment. Given the holding period on these trades is less than an hour the equivalent annual yield on such a trade is not even calculable. There are risks associated with these investment positions, such as the possibility of an entire loss of capital on a trade - but then again what stock doesn’t pose that risk these days?

Binary options trading is an exciting emerging field in the world of investing. As the name implies, there are only two potential outcomes in a binary options trading contract - win or lose. The way most contracts are structured there is a fixed payout for win (typically 75% profit plus return of initial investment).

What people are doing is trading binary option hourly contracts. With just $100 people are able to open accounts, buy call and put options just like the highly collateralized traders do, and clean up in the market. It’s a stunningly simple concept - and the low barrier to entry ($100) is opening up a whole new market of investors hungry for higher returns.

Whenever I want to get a high rate of return (read: always) with a minimum amount of risk I inevitably look for a small, but 99% sure thing gain in the market, then I borrow as much money as I possibly can to increase the amount of purchasing power I have (I use leverage) to buy as many units of that small gain transaction as possible. Perhaps an example will help.

Any option trading tutorial would be incomplete if it didn’t mention a simplistic form of options trading called binary options trading. Not too many investors know about this form of investment but it is a very hot market right now for people not willing to be stuck with long holding period investments such as stocks, bonds, mutual funds, traditional option contracts and futures.