Index trading through binary options. In markets indices are traded most of the major stock exchanges.



Indexes are one of the best tools used by investors when trading in binary markets. Indices are also a liquid and volatile, creating many opportunities for trade. Following the S & P 500, Dow Industrial, NASDAQ, CAC, DAX and FTSE are available for trading on different platforms, trading binary options.

Best opportunity to earn on the indices is trading in volatile markets. Market volatility caused by the publication of reports, both economic and reports of the Central Bank, or, if the market is unstable. There are also other types of binary options, particularly effective when trading in markets with limited range and with low volatility. It is extremely important to assess the state of the market in order to get the most benefit from trade binary options.

Financial markets usually develop in several different directions. In some cases, the market trend is developing in a certain direction in the short or the long term. In other cases, the market trend is not changed in any particular direction in the markets with sideways with a fairly narrow range for a long time. Sometimes the financial markets behave very erratically, continuing to grow in different directions, not really moving or which of the directions. There are other situations in which the market is changing and moving fast in one direction. Assessment of a particular market situation may radically different in the cases of successful and unsuccessful trade. The market environment is determined by supply and demand for a financial instrument. If demand for a product increases gradually, the market is growing. On the other hand, if the supply exceeds the demand for goods, the value of a financial instrument, respectively, falling.

Volatile markets

As soon as there are tensions in the market, it usually becomes choppy or volatile. In this case, the demand for financial instruments at certain times, is reduced. To achieve the required indicators pointing to a certain state of the market, investors should consider the fact that the index may volatile. It is easiest to consider the status of the requested other indexes to the index VIX, which is the limit of the volatility for the S & P 500. With continued increase in the index VIX, the market probably subject to change, as investors can afford to pay more, as the security of transactions. In this case, if the implied volatility rises, the investor has to pay a higher premium for the purchase of index options. Thus, if the trader intended to hedge the portfolio with stock options on a particular index, it will cost more because the implied volatility of the market will increase.

If the projected market will behave unstable chance that the market will be higher or lower than a certain point, much higher than in markets with low threshold variability. Options "touch" (at rates to achieve the-One-touch) to become active, and the same thing happens with the options "hit." For indexes that do not have specific figures, passively following the predicted volatility, investors should consider the state of the implied volatility of the index ETF, which is an indicator of the strength of the index. For example, the table below presents the condition implied, as well as historical volatility, which determines the state of the market NASDAQ:

Range of markets with a flat trend

If the financial instrument has to move, rising and falling in a well-defined framework, it is called a limited instrument with a lateral trend (attached to specific indicators). When it comes to bull or bear markets, from time to time become attached to certain boundaries, to markets such a movement, an additional stimulus, causing the reading is higher or lower than the previously established limits. As soon as the market trend is exhausted, the market itself becomes limited. Traders have long played on the increase, with the bullish trend, leaving the market, the demand for a financial instrument falls and, consequently, its prices are no longer rising. The same thing happens at the end of a bearish trend. Markets with a sideways trend, is formed when the supply and demand for a financial instrument is equal. Market noise promotes the market as up and down, depending on how you are trading in a single day. However, is not helping in the promotion of demand or reverse, the markets are in a sideways trend, limited range (or spread). As well as in determining the trend, analysts use different types of technical analysis for determining whether a market in sideways. "Bollinger Bands" is a technical indicator that allows market analysts to determine whether there will be one or the other side of the market trend. With the indicator "Bollinger Bands" view price data, which allows you to set the level of two standard deviations of the average of the rolling average for the 20-day period. Since the "Bollinger Bands" is constantly decreasing, toward each other, the scope of the basic price of a financial instrument narrow. In the markets, limited in range, (with a sideways trend) volatility is reduced, and the excitement makes it possible for the rapid changes in the market decreases. In the case of markets with limited sideways, investors should take advantage of the possible range of options, such as options, "Miss» (miss), to win the volatility. The trader can choose the option "mission" on the intervals above or below the "Bollinger Bands", suggesting that the market does not go beyond this specific range.

There are many states of market trade, defined as the volume and variability and nastoreniyami market. To successfully trade binary options, it is important to understand the state of the market at the moment, choosing the best option to trade depending on market conditions.

Mark Densel
Author: Mark Densel
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