What does Double Up mean in Binary Options.
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Double Up Binary Options Strategy.
Double up binary options trading strategy. If you have already started dealing with binary options, and you are more than sure that this is the right way to win money, then it might not be a bad idea to take a look at the so called Double-Up strategy thanks to which you will be able to open a second trade that will have identical parameters as the first and original trade.
Normally, the broker will deduct a minor commission for such purpose, for example – 20$.
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Lots of traders are using the Double-Up strategy after observing that their initial trades are going well and they are generating profits. In such case, it is better to seize the moment and exploit the opportunity – in that way you will be able to double the initial investment.
Keep in mind that this strategy will be properly functioning only if the original trade is on the go, which means that you are recording in-the-money status. At this point you can consider doubling up your investment and all you have to do is to open second binary option which has to be in the same direction as the initial one.
Almost every broker supports this kind of strategy these days.
Example of a Double-Up Strategy.
You have performed strong fundamental and technical analyze and you have realized that Facebook will extend its losses after the today’s trading session. In such case you open a new PUT option.
Next you put a wager of 300$
After studying the above posted chart, you have probably spotted that the payout will be 510$ (plus the wager) and the refund – 30$. Now all you have to do is to press the Apply button and you will see a figure displaying the main trade parameters.
Take a closer look at the graph above. When the position is generating profits a green graph line is displayed and vice versa – if you are out-of-the-money you will see a red graph light.
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By the end of the trade, it is great time to examine the possibilities that can let you increase your profits and improve the lock-in wins and reward-to-risk ratio. Make sure to focus on losses while performing such tasks.
In order to achieve the above mentioned object, there are a couple of actions that you might want to give a try. For example, you can evaluate Double Up and this will activate a trade at the current price by the use of almost the same, identical parameters like the initial position you have already opened. In the described scenario here, a second PUT option will be opened based on Facebook.
The maximum loss that you can generate (after opening the second position) is 600$. However, it is highly unlikely for this to happen within the next 10 minutes (since you open this position 10 minutes before the closure). Particularly, this trade is strongly supported by economic and fundamental considerations so the chances of such event are almost 0 percent.
If you use Double Up the maximum profit you can generate will be 1020$ plus deposits while the maximum loss – 60$ providing the ratio for reward-to risk of 420$:60$ or said in other words – 7:1. This value itself is truly impressive because experts recommend seeking 3:1 or higher.
Another binary option strategy that you can use is pairing. However, it is better to use Double Up simply because in such scenarios it is the recommended strategy.
As you can see, when the expiration hit, both of the trades were generating loss and therefore a profit of 1020$ was collected. This result has been achieved by carefully obtaining the loss potential.
Binary Option.
What is a Binary Option?
A binary option is a financial product where the buyer receives a payout or loses their investment, based on if the option expires in the money. Binary options depend on the outcome of a “yes or no” proposition, hence the name “binary.” Binary options have an expiry date and/or time. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price (based on the trade taken) for the trader to make a profit.
A binary option automatically exercises, meaning the gain or loss on the trade is automatically credited or debited to the trader’s account when the option expires.
Binary Options Outside the US.
Basics of a Binary Option.
A binary option may be as simple as whether the share price of ABC will be above $25 on April 22, 2020, at 10:45 a.m. The trader makes a decision, either yes (it will be higher) or no (it will be lower).
Let’s say the trader thinks the price will be trading above $25, on that date and time, and is willing to bet $100 on it. If ABC shares trade above $25 at that date and time, the trader receives a payout per the terms agreed. For example, if the payout was 70%, the binary broker credits the trader’s account with $70.
If the price trades below $25 at that date and time, the trader was wrong and loses their $100 investment in the trade.
Key Takeaways.
Binary options depend on the outcome of a “yes or no” proposition. Traders receive a payout if the binary option expires in the money and incur a loss if it expires out of the money. Binary options set a fixed payout and loss amount. Binary options don’t allow traders to take a position in the underlying security. Most binary options trading occurs outside the United States.
Difference Between Binary and Vanilla Options.
A vanilla American option gives the holder the right to buy or sell an underlying asset at a specified price before the expiration date of the option. A European option is the same, except traders can only exercise that right on the expiration date. Vanilla options, or just “options,” provide the buyer with potential ownership of the underlying asset. When buying these options, traders have fixed risk, but profits vary depending on how far the price of the underlying asset moves.
Binary options differ in that they don’t provide the possibility of taking a position in the underlying asset. Binary options typically specify a fixed maximum payout, while maximum risk is limited to the amount invested in the option. Movement in the underlying asset doesn’t affect the payout received or loss incurred.
The profit or loss depends on whether the price of the underlying is on the correct side of the strike price. Some binary options can be closed before expiration, although this typically reduces the payout received (if the option is in the money).
Binary Options and Regulation.
Binary options occasionally trade on platforms regulated by the Securities and Exchange Commission (SEC) and other regulatory agencies, but most binary options trading occurs outside the United States and may not be regulated. Unregulated binary options brokers don’t have to meet a particular standard; therefore, investors should be wary of the potential for fraud. Conversely, vanilla options trade on regulated U.S. exchanges and are subject to greater oversight.
Real World Binary Options Example.
Nadex is a regulated binary options exchange in the United States. Nadex binary options are based on a “yes or no” proposition and allow traders to exit before expiry. The binary option’s entry price indicates the potential profit or loss, with all options expiring worth $100 or $0.
Let’s assume stock Colgate-Palmolive Co. (CL) is currently trading at $64.75. A binary option has a strike price of $65 and expires tomorrow at 12 p.m. The trader can buy the option for $40. If the price of the stock finishes above $65, the option expires in the money and is worth $100. The trader makes $60 ($100 – $40).
If the option expires and the price of the Colgate is below $65 (out of the money), the trader loses the $40 they put into the option. The potential profit and loss, combined, always equals $100 with a Nadex binary option.
If the trader wanted to make a more significant investment, he or she could change the number of options traded. For example, selecting three contracts, in this case, would up the risk to $120, and increase the profit potential to $180.
Non-Nadex binary options are similar, except they typically aren’t regulated in the United States, often can’t be exited before expiry, usually have fixed percentage payout for wins (whereas Nadex payouts fluctuate based on the price paid for the option) and may not trade in $100 increments.
Double Up Binary Options Strategy.
Double up binary options trading strategy. If you have already started dealing with binary options, and you are more than sure that this is the right way to win money, then it might not be a bad idea to take a look at the so called Double-Up strategy thanks to which you will be able to open a second trade that will have identical parameters as the first and original trade.
Normally, the broker will deduct a minor commission for such purpose, for example – 20$.
Best Forex Brokers for Russian Federation.
Lots of traders are using the Double-Up strategy after observing that their initial trades are going well and they are generating profits. In such case, it is better to seize the moment and exploit the opportunity – in that way you will be able to double the initial investment.
Keep in mind that this strategy will be properly functioning only if the original trade is on the go, which means that you are recording in-the-money status. At this point you can consider doubling up your investment and all you have to do is to open second binary option which has to be in the same direction as the initial one.
Almost every broker supports this kind of strategy these days.
Example of a Double-Up Strategy.
You have performed strong fundamental and technical analyze and you have realized that Facebook will extend its losses after the today’s trading session. In such case you open a new PUT option.
Next you put a wager of 300$
After studying the above posted chart, you have probably spotted that the payout will be 510$ (plus the wager) and the refund – 30$. Now all you have to do is to press the Apply button and you will see a figure displaying the main trade parameters.
Take a closer look at the graph above. When the position is generating profits a green graph line is displayed and vice versa – if you are out-of-the-money you will see a red graph light.
By the end of the trade, it is great time to examine the possibilities that can let you increase your profits and improve the lock-in wins and reward-to-risk ratio. Make sure to focus on losses while performing such tasks.
In order to achieve the above mentioned object, there are a couple of actions that you might want to give a try. For example, you can evaluate Double Up and this will activate a trade at the current price by the use of almost the same, identical parameters like the initial position you have already opened. In the described scenario here, a second PUT option will be opened based on Facebook.
The maximum loss that you can generate (after opening the second position) is 600$. However, it is highly unlikely for this to happen within the next 10 minutes (since you open this position 10 minutes before the closure). Particularly, this trade is strongly supported by economic and fundamental considerations so the chances of such event are almost 0 percent.
If you use Double Up the maximum profit you can generate will be 1020$ plus deposits while the maximum loss – 60$ providing the ratio for reward-to risk of 420$:60$ or said in other words – 7:1. This value itself is truly impressive because experts recommend seeking 3:1 or higher.
Another binary option strategy that you can use is pairing. However, it is better to use Double Up simply because in such scenarios it is the recommended strategy.
As you can see, when the expiration hit, both of the trades were generating loss and therefore a profit of 1020$ was collected. This result has been achieved by carefully obtaining the loss potential.