Options Trading Tips and Strategies Blog





Investing for Beginners with Little Money

There is no doubt investing for beginners with little money is very difficult - but there is hope. Here we'll discuss how to start to invest with little money in order to make a better future for yourself. It's how I started, and you can do it too.

How to Start Investing

How Little Is Too Little to Start?

Back when I was a beginner at investing, I read an article in a magazine that basically asked 3 prominent Wall Street investment advisors what they would do with $1000, $10000, and $100,000 today. Now bear in mind this was some 20+ years ago. Would you believe one of the advisors had the nerve to say (sic), "Don't bother with $1000 - take a vacation instead." Of course if those reading the article had taken those funds at the time and invested in a "little fruit company..." as described by Forrest Gump (Apple), everyone reading that article would have a substantial nest egg today.

Why did I tell you this story? Easy. It's your first lesson: There is no such thing as "too little to invest" or "too late to start." Anyone who tells you otherwise is lying to you and does not have your best interests at heart - and believe me, in the world of investing there are PLENTY of those people around.

How Much Money Do I Need to Start Investing?

How to Get Enough Money to Start Investing

Beginner investors with little money have the burden of needing to gather together enough funds to open an account and get started. That is a substantial challenge to overcome for many.


Here are three ways to overcome the "little money" challenge:


  1. Make small weekly contributions to your investment account
    • Take a small amount of the money you earn from your job or other income and have it automatically deposited in your investment account
  2. Sell non-income producing valuables to raise cash
    • This is slightly more risky however if you have accumulated a lot of "stuff" which you're never going to use - selling it to raise cash for your investments may be a good idea
  3. Start a low budget online business

Set Investing Goals

Figure Out How Much Money You Have to Start Investing>
Then Set Appropriate Goals. Goals Decide Which Actions to Take.
Actions Are What Produce Results

What Type of Investment Is Right for Me?

Overcoming the High Costs of Investing

The right type of investment for beginners typically needs to be simple yet it also needs to fit in with the overall goal or goals of the investor. There is a HUGE variety of investments to choose from today - some of which are clearly NOT suited for most beginners. Having said that, beginner investors with little money also have the additional burden of needing to earn high rates of return in order for the investments to be worthwhile (think of the Apple example above versus the vacation). That is another substantial challenge to overcome.

Here are a couple of ways to overcome the high rates of return challenge:

  1. Keep Costs Down
    • Make as few transactions as possible - as there are normally fees associated with every transaction
  2. Use Exchange Traded Funds to Pool Resources (ETFs)
    • One way to make your cash perform "bigger" is by pooling your funds together with other investors under a professional investment manager. That is exactly what these funds do. Examples include Gold ETFs and Leveraged ETFs
  3. High Risk High Return Investments
    • These are simply NOT for the average beginner - USE with CAUTION!

How to Start Investing Today with Little Money

The bottom line is to get started today by raising cash. As little as $100 will open an account if you're willing to make regular deposits to increase your balance. Adding cash regularly and automatically will bring your balance up to a level where investing it becomes cost-effective.

More Thoughts on Trading without Money

A Short Video on Investing with Low Capital

It can be very difficult to get started investing if you don't have a lot of money to begin with. This can be particularly true of recent college graduates (or even enthusiastic students). Fear not though, as there are ways to trade that don't require a lot of money to start ($200 or less in many cases) and some trades can be done in $5 increments.

Tips on Getting Started Day Trading

Thoughts on How to Start without a lot of Money

Investing in the stock market is somewhat a game for the rich and powerful but there are ways small traders can get in and out quickly and still make a few bucks without risking a lot. This day trading blog helps visitors find ways of trading without putting the rent payment at risk.






Trading Binary Options | 60 Second Options

Trading 60 Second Binary Options Is Risky
Trading 60 Second Binary Options Is Risky

Trading binary options to make money using one or two small trades per day makes it possible to make $300 a day. The options expire on the hour or at the end of the day, so on an ideal day a top trader can get in a couple of trades at the open, make a few bucks, and hit the beach. We’ll walk though a binary put contract example below. Now no one is going to sit here and tell you that making money trading options of any kind is easy, but you have to admit these are as about as simple a high yield investment as you can get. See how you can get started trading options with limited risk.

Why Trading Binary Options Can Work for a lot of People

It’s Honest to God Simple

Binary options are simple. There are two types of binary option – call and put. If you buy a call and the stock price goes up, you make money. Likewise if you buy a put and the stock goes down, you make money. Make sense? Let’s review: Call – up is good. Put – down is good.

You Don’t Have to Care How Much the Stock Price Moves

Seriously… you don’t care whether Microsoft goes up a penny or a dollar. If you own a call binary option, you only care that the price goes up by expiration (usually at the top of the hour).

You Can Make the Trade and Walk Away

Once you make your trade, you can literally walk away and make a cup of coffee or something – because all the elements of the contracts are fixed: the price (at purchase time), the amount of the contract (again, set at purchase), the expiration (top of the hour), the in the money yield (60-75%-again set at purchase), the out of the money yield (0-15%), and the security traded (MSFT, GOOG, Nasdaq, etc.)

Your Position Is Already Locked in to Sell At Expiration

Once the contract is made the only variable is the underlying stock price. No worrying about "getting out too early" or trying to figure out when to sell. The contract is fixed – your position is already promised to be sold (at the top of the hour) when you buy it. Does that make sense?

A Simple Binary Put Option Example

Let’s say for example you think Google’s stock price is too high and is going to come down. The situation is it is 10:15am and you have $200 to play with in your account and decide to make a trade. You decide to buy a binary put option on Google with your $200, expiring at 11:00am and paying out 75% profit in the money and 15% return of capital out of the money. Google’s price when you made the trade was $579.00/share.

In a Binary Put Option You Want the Price of the Stock to Fall


If Google’s stock price begins to fall (from $579.00), your binary put option is in the money and so long as nothing changes your payout will be $350 ($200 investment plus $150 profit). If things turn sour and the Google closes above the strike price of $579.00 at 11:00am then you’ll receive $30 (15% return of investment with $170 loss). That’s a wide range of outcomes… but you can hedge against losses.

You Do Not Care How Much Google’s Price Falls

In a binary put option, you do not care how much Google’s stock price falls. You do not care what Google’s stock price does (in our example) after 11:00am. You only care where Google’s price is AT 11:00am relative to the contract you made at 10:15am.

Even a 1 Cent Fall in Price Pays Out 75%

You read that correctly. In our example, if Google’s price at 11:00am is $578.99 or $0.01 or anywhere in between, your binary put option is in the money and you just made $150 profit. *smiles*

A Leading Place to Trade Binary Options

TradeRush Is a Popular Broker for Many Traders

There are a number of binary option brokers globally today after there having been only a few in business when retail traders were offered the opportunity to use these contracts in 2008 (see more information on all brokers). TradeRush is popular because of their micro investment size (as low as $5) and potentially high turnover rate (some contracts as short as 60 seconds!).


Hedging Binary Options

Reducing Risk Exposure Prior to Trading Lockout

In this video we give an example of how to reduce overall risk exposure in trading binary options.

Option Trading Tutorial | Other Resources

Learn and Master Day Trading Techniques

The more techniques you master, the more likely you will be able to recognize and capitalize on short term inequalities in the market. That is where the big money is made – learn how to quickly make winning positions once you recognize a winning situation.






Options Trading Tutorial

Basic Options Trading Tutorial | Option Trading Terms

As I write this options trading tutorial I like to use the example of a lever used for creating leverage. As Greek scholar Archimedes once reputedly said (sic), "Give me a lever long enough and a fulcrum and I can move the world." Think of options as a really long lever for trading profits. Place your fulcrum (strike price and expiration date) in the right spot and your profits can make planet sized movements. I think the example of a large lever is a good way to explain option trading. We'll take a look at trading put options and trading call options (see our option trading glossary). We'll also give a brief intro to binary options and links out to more information on that new and exciting trading medium.

One note to make is that we do not discuss transaction costs in our examples. Transaction costs at these minimal amounts discussed ($100) would completely eat away profits. Trades in excess of $1000 net investment typically are of large enough scale to overcome the transaction cost efficiency hurdle - so bear that in mind as you make your first trades. Invest at least $1000 per trade.

See also where you can find reputable free options trading courses.

Trading Options Is about Owning and Mastering Leverage


Leverage Turns Small Capital Investments into Huge Gains

If you're new to the concept of trading options, you are probably here trying to learn the basic mechanics of an option trade, what the basic terminology is, and most importantly - how to profit from this knowledge.

What I will tell you is that amazingly, the options market is not rigged against the individual investor. Quite the contrary - getting into the options trading market and making some trades is actually a great way for a person with a modest sum of money ($2000 to $10000 depending on the option broker) to significantly and quickly multiply it. I personally have made around 25% of my income this year trading stock options. There is no particular special formula - it is only a question of understanding what are the positions you can take and what circumstances lead to profit for you. With that, I'm going to take you through some basic examples.

Click for larger image
This Is Why You Don't Trade on Margin

Why Options Trading Is Better Than Trading on Margin

In Two Words: Margin Call

If you ever wondered why it probably isn't in your best interest to trade on margin (and instead get your leverage via the use of put and call options trading) then consider the intra-day trading chart of Proctor and Gamble (as solid a company as they come in the world) on May 6, 2010.

This is what happens when an account faces a margin call, the account broker seizes the assets (COMPLETELY legally and at their whim - selling any or all securities at their discretion) and sells them all at once in the open market to satisfy the margin requirements of the account. The account holder of these securities lost MILLIONS in a matter of seconds. Although the price of P&G appears to move sharply over a few minutes, I actually watched this happen in a matter of SECONDS. The price went from $61 to under $48 in SECONDS, driving the Dow Jones Industrial Average down from about minus 350 on the day to minus ONE THOUSAND for the day, again, in SECONDS.

THIS is why you use cash options to limit your losses... and believe me, P&G stock was not the ONLY stock to similarly implode today.

Options Trading Can Be a Path to Wealth
Options Trading Can Be a Path to Wealth


Glossary for this Basic Options Trading Tutorial

Options Trading Terms

There are a few options trading terms you need to know to be able to understand stock options and how to make your first trades. I will be referring specifically to American options, and I will note later some of the differences between American options and European options.


The Basics of Call Options

Options Trading Tutorial Part 1 of 3 Part Series

We took the time to track down a nice intro to options trading video tutorial series. This three part series covers call options, put options, and the basics of understanding leverage as it applies to stock options. See all of the options trading tips.

Making Money Trading Options

A Favorable Call Option Trade Example

I like to work with the most intuitive of the trades - the call option - first. We'll pretend that we've bought a call option with a strike price of $25.00 on Microsoft stock (let's presume someone simply gave it to us for the moment). It just so happens Microsoft is trading just below $30/share today so we'll pretend it's trading at $30.00 even for simplicity's sake. Given the circumstances we describe - what is our potential payout position?

We own 1 call option of MSFT with a strike price of $25/share. If we were to execute the contract today, we would pay $2500 ($25.00/share * 100 shares) and be immediately able to sell those shares directly in the stock market for $3000 ($30/share * 100 shares) = an instant profit of $500. Pretty kewl, huh?

Let's go one step further. Let's presume we paid $1.00 call premium for the contract - meaning we paid $100 ($1 call premium per share * 100 shares). This means we invested $100 and earned $400 net profit ($500 profit less $100 cost) - a 400% gain!

What would our return have been if we had used our $100 initial investment to buy share directly?
Well - we'd only be able to buy 4 shares (presuming we could buy shares from someone at $25/share) - so when we sold those shares later at $30 per share our profit would be only $20.00 (4 shares * $30 share - 4 shares * $25/share). This represents a 20% profit! 20% is a great return on investment for a short period but $20 in profit simply won't even buy you and your date dinner!

See why option trading is better for the small cap investor? The amplified gains on even relatively small price movements create worthwhile income gains for the fortunate trader.

Learn more about high leverage margin trading.


A Favorable Put Option Trade

A Downward Movement in Share Price Makes Money

Now we look at the less intuitive trade scenario - the put option. We'll pretend that we've bought a put option with a strike price of $25.00 on Microsoft stock (again let's presume someone simply gave it to us for the moment). Let's presume Microsoft is trading at $20/share today. Given the circumstances we describe - what is our potential payout position?

A Put Option Payoff Example

We own 1 put option of MSFT with a strike price of $25/share. If we were to execute the contract today, we would go into the market to buy 100 shares of MSFT for $2000 ($20/share times 100 shares) and force the counterparty to pay $2500 ($25.00/share * 100 shares) for an instant profit of $500. We owned the right to SELL the MSFT shares at $25, regardless of what the market price is for MSFT. The person or company that issued the put option to us MUST buy the shares we sell at the specified strike price ($25) despite the fact they could go into the market and buy them directly cheaper. The put option CONTRACT binds the issuer (or writer) of the contract to our DEMAND to sell the shares of Microsoft ABOVE the present actual price of the common stock of MSFT.

Let's go one step further. Let's presume we paid $1.00 put premium for the contract - meaning we paid $100 ($1 put premium per share * 100 shares). This means we invested $100 and earned $400 net profit ($500 profit less $100 cost) - a 400% gain!

What would our return have been if we had used our $100 initial investment to sell shares directly?
Well - we'd only be able to acquire 5 shares directly in the market ($20/share * 5 shares = $100 initial investment) - so when we sold those shares later at $25 per share (presuming we could force someone to buy shares from us at $25/share) our profit would be only $25.00 (5 shares * $25 share - 5 shares * $20/share). This represents a 25% profit! 25% again is a great return on investment for a short period but $25 still won't buy you and your date dinner!

See why option trading is better for the small cap investor? The amplified gains on even relatively small price movements create worthwhile income gains for the fortunate trader.


Start Options Trading

Learn More About Options Trading of Stocks

See Some Free Offers

What many people don't know is that one of the best and cheapest sources of information about options trading can be found at reputable brokerage firms. Given the heavy regulations of the financial industry you'll find the most legally sound training tools and guidance at one of these major brokerage firms.

Learn more from a reputable source about how to trade options on stocks.

Excerpts from an Options Trading Tutorial Blog

Please also give a look to our option trading tutorial blog which has an awful lot of article reposts and other information not included elsewhere (see sample titles below). You can subscribe via email at no cost to you with your favorite reader or via email.

Basic Options Trading for Beginners

Binary Options Brokers Overview
There are few differences between the best binary options broker services such as EZTrader and StartOptions. Both have advantages and disadvantages but they essentially do the same thing - allow people to trade binary options using a small amount of cash. Here we will review a few of them and try to give some guidance as to what to look for when selecting one for binary options trading. **
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Free Online Trading Sites - 3 Places to Trade Without Fees
Are There Really Ways to Trade without Commissions or Fees? Savvy day traders these days have found free online trading sites that offer ways to use small capital investments in a way that does not involve fees or commission. Here we will look at some of these alternative platforms and elaborate on the strengths and weaknesses of each. Binary Options The first platform we will look at is the
>> Read More

Binary Options Hedge vs Trading Barrier Options
Are Barrier Options the Right Choice for You? Before one considers trading barrier options one should also consider the similar alternative investment, the binary options hedge. Although the investments are very similar in terms of in the money yields offered, the risk characteristics are considerably different. Many times the determining factor in deciding which asset to trade comes down to a
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Option Trading Resources

Courtesy of Amazon.com

I strongly urge you to learn as much as you can about options trading and the stock market and financial analysis in general. The more you learn about analyzing companies, the greater the likelihood you'll make staggering profits by option trading as I have. Here are some resources we recommend.

Binary Options - A Simplified Version of Options Trading

Another much simpler, but similar type of options trading is called a binary option. What makes it simple is that the binary option eliminates the call and put premium as well as the transaction cost (commission). It also eliminates the SCALE issue relative to trading - meaning it does not matter whether the Microsoft shares in our example go up $5.00 (as in our call option example above) or only a nickle. The payout is the same. Likewise for the put option example. In our put option example we care HOW MUCH the shares move. In a binary put option trade, only the downward direction matters.

In a binary option only the direction of movement matters - not the size of the movement. Learn more about binary options trading.

Binary Options Trading Tutorial / Blog

If you found this post informative, please be sure to stop by and subscribe to our option trading tutorial blog - you'll get updates in your email as we post content to the website Make300aday.com where we reveal tips and strategies on how to trade profitably (in and out quickly) in the market. See our latest binary options blog headlines at Make Money Fast with Options. Our options trading tutorial will take you through all the basic mechanics of options trades. (See sample titles below).

Binary Option Broker Reviews and Tips

We took a few moments to review the leading retail binary option brokers, such as Optionbit, TradeRush, AnyOption EZTrader and optionFair. Give our review and comparison pages a look.

Broker Reviews | Trading Strategies

Bloombex Options Review – Binary, Pair, Ladder, Follow, One-Touch and More
Bloombex Options operates a really wonderful and robust binary trading platform. This broker offers the best of many forms of this type of trading, with a wonderful spread of assets and contracts to consider. Read more from: Bloombex Options Review – Binary, Pair, Ladder, Follow, One-Touch and More - a post from: Binary Option Broker Reviews - Binary Options Trading Strategies
>> Read More

5 Risk Free Trades on Digital Options
So I was just looking around to see what promos were out there and I saw a 5 risk free trades offer on binary options. That sort of offer does come available once in a while, but usually it doesn't cover more than one trade. Read more from: 5 Risk Free Trades on Digital Options - a post from: Binary Option Broker Reviews - Binary Options Trading Strategies
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NRGBinary Review
We thought we'd take a moment to review relative new-comer NRGbinary. Founded in 2013, NRGbinary is already an internationally renowned private trading and investment company. Read more from: NRGBinary Review - a post from: Binary Option Broker Reviews - Binary Options Trading Strategies
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Binary Options Tips

Binary options are high yield investments. Yields on these short term contracts range from the high 50% range upwards of 80% depending on the security traded and the broker's terms at the time of purchase. We'll also take a look at similar assets called barrier options, and the binary options brokers who offer them.

Why People Are Choosing Binary Options Trading

Fixed Yields, Short Duration, Low Maintenance

Why are people choosing binary options over virtually every other potential type of asset available to trade today? In a word: control. Whereas in most trading environments the individual investor is literally at the mercy of his broker or the market makers for a particular asset (particularly for high yield investments using high leverage), a person engaged in binary options trading has the blessing of control of the trade from purchase through expiration. At no time can the trade be subject to a margin call or have bouts of second-guessing as to when to sell the asset.

While this may not seem like a big deal at first glance, anyone who has ever tried to make money trading on margin - either with options contracts or a margin account or perhaps futures trading knows all too well the risks associated with losing control of ones account. The ability to control and know with certainty many of the variables associated with other types of trades are fixed in binary options trading is very reassuring to traders used to having to monitor positions 24 hours a day 5 days a week.

What Sort of Securities Are Traded as Binary Options

Only the Largest, Best Known, Most Liquid Securities Traded

Only the largest most liquid securities are traded on the binary options exchanges. Although not all brokers offer the same securities, most brokers will offer contracts on well known assets like gold, the Dow 30 Index, the S&P 500, and foreign securities such as Bayer or perhaps Volkswagon. Some brokers tend to focus more on foreign stock exchanges, while others are more or less limited to US stock market securities. It's well worthwhile to read all the binary options broker reviews below - as the profiles for each broker describes which assets they offer.

Risks Associated with Binary Options Trading

Loss of Capital a Significant Risk

The very nature of binary options contracts makes them subject to significant capital losses, however some binary options trading strategies have been designed to reduce that risk substantially. There are many ways to trade binary options, either as stand-alone trades or in combination with other asset types. While no one would argue that binary options aren't risky on their own, they actually present a powerful hedging tool for traders willing to take on that risk on concert with other trades as a hedge against short term market losses.

Here are a few brief reviews of the leading binary options brokers. There are a few restrictions on US binary options trading - so bear that in mind.

  • AnyOption - Arguably the best and most diverse place to do binary options trading. They have the most securities to trade and the best reputation. See the review for more information.
  • StartOptions - StartOptions has a terrific bonus cash problem however the DO NOT accept US Residents as clients. For Great bonus cash offers for US Residents, consider GlobalOption instead. They offer the best variety of Asian stocks.
  • GlobalOption - GlobalOption offers an AWESOME bonus cash program on first time deposits from NEW customers. Read the review for details.
  • TradeRush - See a review of binary options broker TradeRush and their very popular binary options cash bonus plans.
  • optionFair - optionFair is definitely the most innovative binary options broker in the market. They trade a wide variety of contract types, although their number of securities is a little bit more limited than some brokers.
  • Optionbit - Optionbit is among the most innovative binary options brokers, offering the much sough after barrier options to trade on a number of contracts. And better still - they accept US clients!
  • ZoneOptions - is a relative newcomer with a low-capital risk-free trading offer.
  • StockPair - see our own internal review of paired options broker StockPair.

Gold Binary Options

One of the investments that has gotten alot of attention of late is Gold. The price of gold has increased dramatically from $500/Oz just a few years ago to over $1400 per ounce today. As a result it has become increasingly difficult make money buying gold.

One little know way to make money buying gold without needing a lot of capital? You guessed it: Gold binary options.


Barrier Options

Inbound/OutBound Binary Options

One of the more interesting types of binary options contracts we have run into most recently is the barrier options contract, or as some have called it bounded options trading. Whatever we end up branding it, it basically revolves around the concept of buying a range of option strike prices that are in the money with one click of the button rather than force a trader to create the positions from singular trades.

This is a vastly more efficient way to establish favored hedged positions. You chose inbound contracts if you expect the security to trade within a specific range, or you choose outbound if you think the asset will be out of the range at expiration. Other similar types of contracts might involve one-touch or no-touch barrier options - where the asset expires in the money if a barrier or threshold is crossed. When combined into a binary options style contract with simple fixed yield payout and even dollar increment buy-ins... well you can see why these are becoming very popular.

Options Trading Strategies and Signals






Binary Options Trading System

Binary Options Do Not Have to Be All or Nothing

This post introduces a binary options trading system which will demonstrate how to mitigate some of the risks associated with these highly powerful investment trades. It will also demonstrate the characteristics and usefulness of these contracts and provide some insight as to how to use them to augment portfolio returns.

Binary Options Trading System Introduction

The Basic Payout Structure of a Binary Options Contract

First and foremost all images and examples were developed by and used with permission of binary-option-broker.com. Trading binary options requires the use of a specialist trading firm called a binary option broker. There are numerous uses of binary options trading described in further detail elsewhere. It also really helps to have a good feel for basic options trading market economics.

With that out of the way, the most important thing to understand about this binary options trading strategy is that it is designed to help traders both understand the nature of these great contracts: to understand the strengths of using them, and to prepare for and mitigate some of their weaknesses. First I'd like to show you the basic payout structure of a binary options contract, in this case, a call option (see glossary of binary options trading terms).

A Binary Call Option

An Open or Un-Hedged Binary Call Option Payout Example

In the video example above you see initially the payout characteristics of a $200 binary call option with 75% yield on in the money contracts and 15% return of capital on out of the money contracts. Note that an in the money contract pays $350 ($200 initial investment plus $150 profit), an out of the money contract pays $30 ($200 x 15%), and an at the money contract pays $200 (initial investment amount).

Most people would not be happy with this sort of "all or nothing" investment structure, yet nonetheless some traders do in fact use binary options trading systems that involve unhedged positions like this. We however are going to attempt to demonstrate how to mitigate the weaknesses of the out of the money position... by adding an equal and opposite put binary options contract on the same security.


Developing a Binary Options Hedge

Using a Put Option to Hedge an In the Money Call Option

As you might imagine, a binary options put contract has the exact opposite payout structure of the binary options call contract we discussed earlier. In other words when the stock price at expiration is less than the strike price on the binary options put contract, the binary put expires in the money and the payout (assuming the same characteristics as in our previous example) is $350. Similarly, an out of the money contract would pay $30 and an at the money contract would pay $200.

How would we combine the two contracts to create a hedged position which might be of benefit to the trader? Well this is where the details of the trades matter. In order for a call option to be in the money, the stock price must be higher than the strike price at expiration, right? Well what if during the term of the contract (after purchase but before expiration) the stock price had in fact moved upward, say from $577.50 (in our illustrated example above) up to $579? At that point our binary call would be in the money, wouldn't it?

What if then we decides to buy a $200 put option at that moment (when stock price is $579)? What would the payout structure look like?

A Hedged Binary Options Trading System Payout Example

The Payout Structure of a Combined Binary Option Call with Put Contracts

You'll note in the picture above that we've not boxed in an area between share prices of $577.50 per share and $579 per share where BOTH the binary call option AND the binary put option are in the money and yield 75%. This produces a payout structure where the (now 2) initial investments of $200 (one call followed by one put) EACH payout $350 (each pays out $200 initial investment plus $150 profit), for a total cash flow of $700 ($400 initial investment plus $300 profit).

In the case where the stock price at expiration is anywhere outside the range of $577.50 to $579, one of the contracts expires out of the money. In this case one contract is in the money (paying $350), one contract is out of the money (paying $30) for a net payment of $380 - a loss of 5%. In the odd case where the stock price at expiration is either exactly $577.50 OR exactly $579, one option expires at the money (paying $200) while the other contract expires in the money (paying $350) for a net cash flow of $550, a profit of 37.5%.

Making Money Trading Binary Options

News and Trading Strategies for Binary Options Traders

Below you'll find the latest economic opinion news as well as some great links to popular binary options trading strategies. I also strongly recommend you look more into the basics of options trading for insights on fundamental market relationships and how to use them to learn to read stock markets. Further down you'll find more info on day trading and economic commentary and discussion.


Basic Options Trading Market Economics

A Political and Economics Blog for Options Traders

Below you'll find more stories on the important economic news and developments of the day. You can use these insights to help formulate your trading strategy for the upcoming day, week or months. The blog is focused on the macro economic impact of political decisions on options trading.

Binary Options Tutorial – Economy Politics Global Markets Commentary

Economy Welcomes Class of 2015 Republican Congress
So obviously it has been quite awhile since I have had anything to say – at least not much to say here. We have been locked politically in a twilight zone of do-nothingness since Barack Obama was (re)elected in 2012. … Continue reading →
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Quantitative Easing – A Case Study in the Limitations of Monetary Policy
As you might guess, add me to the list of hind-sighters looking back and calling Quantitative Easing a failed policy. The idea and intentions were good, but any objective observer can only conclude that this has been a perfect case … Continue reading →
>> Read More

Republican House Shuts Down Faith in the System
I really had a hard time believing the Congress could be so stupid as to shut down the government again, yet here we are. Led by none other than the do-nothing leader of the House himself, Speaker John Boehner. The … Continue reading →
>> Read More






StockPair - a Review

StockPair is an interesting alternative to typical binary options trading. Because of the variety of contracts they offer -- specialized hybrids of the field -- they can provide the trader with a lower risk (but still high reward) strategy of investing.


Fixed or Floating Pairs Make Interesting Investing Choices for Day Traders

The trader who uses StockPair has an interesting set of choices to make when it comes to contract selection. While a fixed pair acts more like a typical binary options contract, a floating pair can behave quite differently. Floating pairs with set beginning and ending dates offer a varying yield depending on the prevailing circumstances of the market. As the market favors one side or the other of a pair, yields are reduced for the currently winning side. While it may seem counterintuitive to want to invest in an asset with reduced or declining yields, it actually can make a lot of sense.


Earning High Yields with Low Risk Investments - When Winners Are Picked Ahead of Time

As we alluded to above, a floating pair option at Stockpair can result in the opportunity to invest in a (still relative to other investments globally) high yield asset - only now the risk is substantially lower than a typical binary options contract. Why is this? Consider: The reason that one side of a floating pair asset has declined in yield is that it is already ahead (perhaps significantly) of the other asset in the pair. Given return results are based on a fixed ending date, the likelihood of having a winning (in the money) trade is increasing each day that expiration draws closer. The cool thing is that the yields (for that remaining time until expiration) typically are way higher than what you can invest in elsewhere. Get it?


More on:


Binary Options

Pair Options

American Options





Options Trading Tutorial - Simple Way to Learn Options 6937

I was wondering if I'd ever read a trading options tutorial that wasn't impossible to understand. It turns out that if you look for more simplified forms of options to trade the math isn't that bad.

Is There a Math-Free Trading Options Tutorial?
I don't know about you, but I'm not all that much of a math guy. I don't like having to try to figure out a bunch of stuff when all I want to do is click a button and buy a stock, get it? Just gimme something that I can trade quickly, ya know?

Thank You Binary Trading
Binary options trading is about as stripped down a style of options investing as you can get. No complex pricing computations, no beta, or alpha, or any of that other lingo. It's simple: if I think the stock is going up, I buy a call. If I think it is going down, I buy a put. Whatever position I end up holding I find out in a little while whether I make or lose money. Piece of cake. Contracts are sold in fixed dollar amounts so no fumbling with numbers of shares to buy. All contracts get ridden out to expiration and then paid out. Simple enough? The return on investment is fixed too! By and large contracts yield about 70%.

Options Trading for Beginners
At any rate I did find a trading options tutorial on these simple securities. I'm about a third of the way through the information and it hasn't disappointed me so far.

More info:
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How Making Money Trading Stocks Is Marginalized for Small Cap Investors 9449

Central banks have turned making money trading stocks into a challenging affair. Well funded currency traders and monetary authorities are in a continuous battle to manipulate global markets and economies. Day traders have been pushed to the sidelines in several markets and instead seek higher returns in forums where they are more effective.

Options Trading as a Way to Make Money Trading Stocks

One of the more popular ways to continue making money trading stocks over the last decade has been to use call and put options to increase buying power. The key to making big money trading options is by controlling large quantities of stock without having to put up all of the money needed to actually own those shares. The problem has become that so many contracts were created (one side of which inevitably ends up worthless) that a number of firms became insolvent, and even more banks and insurance companies would have folded had the United States Government not intervened.

Option trading works great for people with a decent capital base, but transaction costs make it prohibitive for small investors. This inefficiency of transactions puts a minimum size of investment made (typically $1000 or more) puts severe limitations on small capital traders trying to maximize their buying power. Day trading robot programs and high frequency trading servers have made profiteering in options trading considerably more difficult than in prior years.

How to Trade Options with Minimal Capital

Two other popular alternatives for poorly capitalized traders are binary options and forex investing. Neither of these trading markets requires much money to start and binary options offer incredible simplicity while forex trading may be a little too complex to start a trader's career. For the majority of small traders an investment in binary options is probably best.

Binary Options

People familiar with European options trading will be familiar with many of the characteristics of a binary option. A popular difference between European options and binary options is there are no fees or commissions trading binary options. Because yields on binaries are in the range of 60% and up even a small $200 trade can earn over $100 a day.

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Forex Trading Signals and the AUDJPY 1837

Investors day trading using forex signals have an advantage in their ability to see capital flows before they hit markets. Capitalizing on knowledge of forex market movements involves learning relationships and executing prepared strategies ahead of the capital movements.

Understand Forex Trading

Smart day traders pay attention to forex markets in order to gauge market direction. Many have noticed the strong coupling between currency pairs like AUDJPY and the S&P 500 mini blocks (e-minis). Whether you want to believe it or not, asset prices are impacted by forex trading every single day.

What Does Forex Matter to the Stock Market

The long established pre-eminensce of the USD has negative impacts on stock prices. Myopic US investors frequently ignore the movement of the dollar to their detriment. An inverse relationship implies that as the USD grows stronger against other major global currencies the S&P 500 falls. Conversely the reverse is typically also true, that as the US Dollar falls, the major American stock market indices will rise. These are basic stock market and forex market relationships you need to study to day trade successfully.

Taking Advantage of Tight Relationships Has Become Easier for Retail Investors

The key for any trader then is to capitalize on well established forex / equities relationships and grab small quick profits. This used to require lots of capital - not anymore. Tools like high frequency trading, complex computer programs, and large block share trading make the movement of capital much faster. Even the most modest amount of capital has enough buying power in the right market and account setup.

Riding with the Smart Money

Why do investors use forex trading signals? Have you ever wondered who those smart money traders were and what they were buying? You might consider this - while our governments are printing money like it is going out of style, wealthy tycoons and bankers are pushing it around the globe. Large forex traders can help but cause visible market movements which ultimately can be picked up and acted upon in ancilliary markets. Why does this reaction happen? It is a money multiplier effect. Forex traders create positions by taking (effectively) loans in the market. Deposits (the offset to the loans made) get invested elsewhere, driving up asset prices with increased demand (or alternatively increased supply of currency). Traders use these forex trading signals to pick market direction and dive in for profit. Those without the resources needed to follow the markets closely still profit by using binary options signals services instead.

How the Modern Small Capital Investor Trades Profitably

One of the ways smaller traders invest profitably is by taking advantage of tiny option contracts called binary options. Whether a trader works with regular options, binary options, or stocks - forex trading signals always play a roll in determining short term direction bias. Forex trading signals have been integral to the success of day traders no matter the resultant trade.

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Simple Investment That Beats Fx without the Headaches

Savvy traders are making the easy investment choice of using binary options to day trade stocks. Three of the most appealing features are the non-existent fees and commissions, the high rates of return, and the hourly or end of day expiration. What could be better? Someone must have been listening to the needs of day traders when binary options were designed.
Tips on Finding the Right Binary Option Broker
Getting started trading involves finding the right broker who carries the securities you're interested in. One broker might carry domestic (US) stocks like GE and Microsoft while another trades BMW and Google. Still other brokers cover commodities and foreign stock market indexes. The heavy volume and high profile nature of these securities makes for an easy investment decision when it comes to trading binary options. Gold, platinum, oil, and copper can be bought and sold via binary options as well.
Traders Love the Ease of Use
Trading in even dollar figures is another factor in making binaries an easy investment. Paring down the complexities out of day trading is the true purpose of the binary option: to make it possible to focus on limited variables - like direction of stock price movement - in order to make money. . .
Small Cap Traders Find Binary Options Profitable
Imagine investing just a hundred dollars. Investing such a small amount in other securities simply wouldn't make sense due to the commissions and spreads making such a small investment size impossible to make profitable. Because there is no commission or spread, investments (like no load mutual funds) have no "transactional overhead" associated with them.

Day trading binary options is an easy investment because it is a no commission, no spread, virtually no math way to invest. See how a smart binary options trader invests.

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Commodity Option Trading on the Cheap -- Micro Capital Option Trades

Investors are making money commodity options trading using far less capital than typically one might think necessary for these high profile investments. Familiar commodities such as gold, silver, and oil are available on binary options exchanges. The complex rules and high entry costs associated with normal commodity and futures trading aren't present in binary contracts.

Common Examples of Commodity Options Trading on Binary Exchanges

Binary options brokers have added commodity options trading on popular metals like gold, silver and copper - as well as oil. Some brokers have added a number of these high profile items on their binary trading desk for high return options action.

High Flying Yields Attract Low Capital Investors

Those unfamiliar with binary options come to find they yield 60-75% +/- with durations in the range of minutes to about a week depending. A typical contract expiring at 11:00am might pay a $70 profit for each $100 unit invested - providing it expires in the money.

Even the Losers Get Lucky Sometimes

All is not lost for investors whose gold or oil binary option goes sour - as sometimes up to 15% of capital is returned on OTM contracts. In our previous example for each $100 investment gone sour the investor could expect to receive fifteen dollars back at expiration.

This aspect is covered in greater detail on our binary options trading and hedging post.

Forex Binary Options Hedging with Call and Put Trades 

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Trading Binary Options - Short Duration Trades Make Money Fast

A Binary Options Trade with Both Call and Put Positions Can Double Your Profits






Executing Binary Option Trades - 60 Percent Yields - The Sky Is the Limit

There are a few forms of binary option trading but each trade always boils down to whether the contract is in the money or not. Binary option traders count down to expiration in minutes or hours rather than weeks - making binary option trading among the fastest paced markets around. Day traders who learn to land in the money trading binary options make very good money indeed.

High Yields Attract Investors to Binary Option Trading
Typical yields on a binary option contract fall anywhere from 60-81% depending on the particular issue and binary options broker. As you might expect, given the rapid/hourly turnover computing a compounded return is essentially impossible. Here's a basic payoff one might see on any given day on a binary option contract.

Consider a contract that ends with a positive result. OK so what would the cash payout on a 75% yield call contract be if it expired with the stock price above the strike price? The payout on your $200 position would be $350, including your initial investment of $200 plus $150 in profit.

What About Out of the Money Binary Trades
But what about a binary option scenario which expires unfavorably? Much will hang on what type of contracts your broker writes. While some brokers allow trading of binary options in a secondary market - unloading unwanted positions, others are hold to maturity only. Brokers that require holding to maturity do sometimes have a fixed payout on out of the money contracts - saving the hassle of trying to squeeze blood from a stone. In other cases a trader might not be able to move his or her position at all. The bottom line is that it is difficult to get out of an out of the money binary option trade.

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Cheap Stock Trading - No Longer the Day Trader's Formula for Success

Many novices who try cheap stock trading fail to realize they have much more to lose than gain by playing in the stock market. More experienced traders know all too well the market is a very unforgiving place to invest money. The notion of day traders playing freely in the equities market are over is well founded.

Day Traders Not Fooled by the Media Hype
What we see in the capital markets today is a preponderance of the individual day traders' activity is concentrated in more leveraged forms of investing such as options and forex. People new to the market may be attracted to the cheap stock trading ads seen on the media, television, etc., but the real action and money is being made elsewhere.

Why Cheap Stock Trading Is Out and Options Are In
Day traders usually begin with great enthusiasm to trade stocks on the great American exchanges only to find that love is not returned. Losses typically mount quickly for the lightly capitalized day trader and any enthusiasm for stocks quickly wanes.

Why Leverage Makes a Difference
Other markets treat day traders more kindly - offering trading leverage and thus making individual level trades more economical. Basically a person with only a thousand dollars to work with can invest as though they had $10,000 or even $100,000 or more to invest. With the right type of account returns can be amplified 100 fold or more depending on the risk taken and the margin requirements set for that particular type of security.

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A Put Option Payoff Coming Soon - 3 Current Situations Are Pointing Stocks Down

Getting access to a lucrative put option payoff will be difficult for traders not fortunate enough to have a full access margin account. The rest of the traders in the stock market who do have the ability to act on put options may have some significant opportunities ahead given the continuing shocks to the economy. Most of the market has had a significant run up since the lows of March however clearly the results have yet to reach main street. While investors celebrate the rally, ordinary citizens continue to struggle with 10% unemployment - leaving coal in the stockings of Main street - and opening opportunity for a late year put option payoff.

Could A Put Option Payoff on Market Be Coming Soon in the Future?
The late year rally in the Dow Jones and S&P 500 have been welcome news to investors with retirement accounts and 401Ks invested in those indices. Wise investors are taking advantage of the gains and present market liquidity by rebalancing money out of those stock funds and into safe havens such as money market funds, treasuries, and high return CDs. Some investors expect a pull back from recent highs and seek a put option payoff to ring in 2010.

Reform Initiatives Stalled While Expensive Wars Continue
President Obama has been caught between a rock and a hard place in trying to make headway on domestic fronts while trying to manage two problematic war efforts. His health care initiative - designed to save money on treatments while expanding overall coverage is moving like molasses through the halls of Congress. While Congress is stalled in the chamber of the Senate, the US military remains stuck in hostile territories Afganistan and Iraq. As a result fewer dollars and man-hours are available for job creation intitiatives and stimulus.

See how you can get in on the put options trading cheaply using binary options

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A Binary Option Trade with Call and Put Positions Can Double Your Profits






How A Binary Options Trade with Both Call and Put Positions Can Double Your Profits

Creating a binary option trade with call and put contracts seems like a loser play but it can pay handsomely should circumstances fall in your favor. Depending on how you look at it - you either can double up profits or mitigate losses. Binary trades with call and put option contracts mitigate losses and leave windows open for doubling up gains.

How to Setup Your Binary Option Positions with Call and Put Trades
The goal of any hedging strategy is to narrow the possible results of any investment - and this is what a binary call and put trade position does. Let's look at picking a $10 strike price binary call contract for $200. Now imagine the contract is in the money and it's still fairly early in the hour prior to expiry. It isn't out of the question your stock could be at $10.75 depending on market movements that day. How can you be certain your contract is going to remain firm leading up to expiration? What can you do to lock in at least some of your gains in a supposedly "all or nothing" contract?

Hedging with an Exact Opposite Position
The answer is either a full or partial hedge making a binary option trade with a call and put - dollar and expiration matched. Fully matching your call and put positions will minimize your risk, while partially hedging (leaving some part of the trade open) can give the trader some added weight to one side if he or she thinks that side of the trade is fairly sure. While a two position trade like this may seem fairly straightforward more often than not having numbers to work with is helpful. At any rate - with any luck your trades will come out in the money.

Learn more about making binary option trades with call and put positions.

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Trading Binary Options - Fast Money on Ultra-Short Duration Positions

The opening of binary options trading to retail investors has been warmly received. Day trading binary options has become very much en vogue for investors looking for a high rate of return but no longer willing to wait patiently for corporate executives to create wealth to return to shareholders. In short: the halcion days of buying for the long term are over.

Binary Option Contracts Feature Fixed Parameters
Over the past year the excitement about binary options trading has grown. Binary options (as one might expect) offer only two outcomes - gain or loss. A typical contract structure might offer somewhere between 60-75% return on investment for an in the money trade, whereas zero to perhaps 15% return of principal might be paid out on an out of the money contract at expiration. These terms would be set at option purchase. Let's consider an example.

Binary Option Trading Example
A successful $200 trade in a binary options trading contract would pay $350 ($200 initial investment plus 75% profit), while an unsuccessful trade might pay $30 (15% of the original $200 investment). It may seem odd to get money back on an out of the money option - but it comes in handy. I like to think of it as something of a 'door prize' just for showing up.

Name Brand Securities Only, Please
Not too many stocks are available for retail traders to play with but there still is some variety. The plus side of limited availability is that all the securities are the most highly recognized brands in the world.

Short Duration Equals High Compounding Factor
One great aspect of this type of investment is the quick turnover rate of investments. The option contracts expire either hourly or at the end of the day - no more waiting years (or never) for an investment to pay off. Compounding returns happens at a much quicker rate than traditional investments.

Few Restrictions Make a Binary Options Trading Account Easy to Start
It takes very little to begin trading binary options - truly making it an arena for the masses. As little as $100 will open an account - and minimum trade size is a scant $30 - not the thousands needed to trade in traditional markets. 2009 saw a lot of growth in the binary option trading arena, and indications are that as the number of investors grows, so too will the number of available securities on which to trade.

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Day Trading Simplified with Forex Binary Option Broker

Small cap investors are using a forex binary option broker to access the high yield binary option trading arena.

Over $110 billion dollars change hands on the foreign exchange market daily - and for many years small cap traders had no access to it. One would think the vast amounts of individual currency changing hands can at times create imbalances in the market however the retail (as it is called) market is dwarfed by the daily volume of the amounts of institutional trades that pass through the Bank of International Settlements (BIS).

The truth of the matter is the vasy majority of trading is done by hedge funds and institutions trading foreign currencies for their own accounts - accounting for more than three quarters of all trading volume. This makes trading directly on foreign currency movements a dicey proposition for retail day traders like you and I. Smaller investors who had sought a more even playing field have opted to use a forex binary options broker instead.

Nearly all of the most popular cross rates have been opened for trading by forex binary option broker dealer companies. Trading this way offers high yields in a fixed amount investment environment (limiting losses) with investments turning over hourly or daily. Simplified trades are made in fixed dollar amounts with yields and payouts set at the time of contract by the forex binary option broker. The investor then waits for the contract to expire and the spot price at expiry is compared to the contract strike price (the spot price at time of contract purchase) and the payouts are issued accordingly.

It only takes $100 to open an account with a forex binary option broker. The easy to understand contracts and fixed payouts reduce the complications normally associated with options trading. As hard to believe as it sounds, as little as two $200 investments can make $300 per day.

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How I Sought to Make 300 a Day

I wanted to find ways to make 300 a day from home and sought out the various usual methods to make money online. The main methods most people hear about on the internet are some form of web marketing, day trading, and taking surveys. I did not get paid the one time I tried surveys so I bounced that idea. Internet marketing involved quite a bit of patience and learning. Lastly was investing which kind of assumes you have money to start. My goal was to find the simplest way to make 300 a day with the least amount of money to start.

It was clear to me right away that taking surveys wasn't going to work. There are only so many surveys one can do in a day. You don't have to be a math genius to know that five bucks per survey that takes 30 minutes to do equals ten bucks an hour... not a formula for success.

Next on my list was internet marketing. I have to admit, I made a few bucks web marketing but it took a long time and quite a bit of money invested in books and courses. Internet marketing did work pretty good, but it was less than I was looking for. Web marketing helped me make a few extra bucks per month. Unfortunately this isn't for everyone given the time and money needed.

Lastly I gave stock market trading a try. Day trading has a poor reputation, and with good reason. Market speculators and day traders had much to do with the two most recent bubbles. Things were likely to go bad because even the experts really didn't know the value of the securities they were buying. I dedicated my search to finding the easiest and cheap to understand way to trade.

EZTraderOne thing I tried was currency trading. Stock trading was another alternative. Another thing I tried was market timing mutual funds. Options trading worked awesome but required a lot of money. My background in finance made it possible for me to do well in these areas but not everyone is so blessed. Then I ran across an unbelievably simplistic type of security called a binary option.

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Make Money Fast and Easy with Binary Options

Financially savvy individuals have a new way to make money fast and easy and they're finding a little capital can go a long way. If you're good with computers or know a little about forex or simply have the guts to take a chance on something new you should be able to take advantage of one of these new day trading opportunities.

Whatever your skill set, you have to really pick one strategy and go for it if you intend to make your fortune. This post introduces a couple of new trading opportunities that greatly reduce some of the barriers to getting started. The new program I describe is not only makes money fast and easy but it also works with good regularity. Traders are liking this program because it takes so little capital to begin. More capital is always better, but you might be surprised how much you can buy with just $100 to start.

In order to make money fast and easy trading forex you need three things: a forex trading account, a forex trading software program, and the aforementioned few hundred dollars. Once the pieces are in place and tested it's time to thow the switch and stand back.

People with limited forex experience might instead opt for another fast trading money maker called binary options trading. Outcomes are less steady in the binary options market but again it's cheap to start and money turns over really fast. If you have the time to monitor your investments, binaries may be your thing because they aren't automated. If you have time and want consistent returns, go with the forex. Whatever path you choose, the nice thing is that $100 is enough to begin.

If forex trading doesn't sound like your cup of tea, consider make money fast and easy trading binary options instead.

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Option Trading Tutorial - Learn Forex Option Trading the Easy Way

No option trading tutorial would be finished without talking about binary options. 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. You may look on the web for another option trading tutorial if you want to know about the more common form of contracts trading. As a result we don't want to talk about other types of trades in this option trading tutorial save to compare them to binary options.

Contracts like these have only two outcomes. Either you choose the "up" side of the switch, or the "down" side. It may make more sense to you to think of this as of "on" or "off". For our purposes these choices refer to changes in stock prices or cross rate movements.

The trading software computes the payouts (also fixed based on the contract) and if satisfied with the contact, the investor submits the order.

What's neat about these contracts is only the direction of price movement matters, not the magnitude. If the stock moves two dimes or a dollar the contract yields the same value at expiration. A 75% profit is earned on an "in the money contract" whether contract is in the money by $10 or a penny. Options expire typically hourly so a successful trader can execute many contracts every day.


In Summation for this Option Trading Tutorial:

Trades require the investor to choose only how much to invest, which security, and which direction.

That's the end of our option trading tutorial. See the related articles for other option trading tutorial and day trading information and articles.

Check out the demonstration video or look at the differences between binary options trading and standard options today.

Check out these other investment and day trading related articles:
What Is a Margin Account? How Leverage Makes Money for Day Traders
Binary Options Trading System
Highest Return Investments Always Require Leverage
Making Money with Binary Options

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