Trade Stocks/Stocks Trading
In order to gain profit from stocks trading in binary options, you have to understand the behavior of stocks trading. Stocks is one of the trading asset constitutes which traders can trade in binary options market. It is possible to trade stocks in binary options. More than hundreds of stocks are traded in binary options. You will find several stocks list from the several stock exchange around the world in the binary options brokers.
A good binary option broker include stocks from most of the major stock exchanges like the London Stock Exchange, and the stock exchanges of America, Switzerland, Germany, Spain, the Eurostoxx exchange (which includes several stocks of the companies of Belgium, Netherlands and other countries of central Europe) as well as selected stock exchanges from Asia and Middle East. This huge variety gives the stocks traders’ opportunity to trade the best stocks.
Trade Stocks/Stocks Trading: The Factors You Should Count
Traders must be well aware of the factors of stocks trading which causes stocks price movement. Here are the factors:
(1) Understand the Market Sentiment: Sometimes market has the gloomy sentiment and the global economy stays in the worrying position. In this case, most of the traders hold their cash and following by the fall of stock prices they sell their stock holdings.
(2) Analyze Earning Reports: Stock prices can rise or fall respectively by the good or bad earning reports. So what is the matter with good or bad earning reports? It may look bad that a company’s earnings report shows the loss, but for the investors, it may be a positive sign if the loss is lesser than the previous one. It means the demand is increasing for that company stock and a sign of asset price rise.
On the other hand, it is not necessary to view a company’s profit as the positive light because the profit can be lesser than the previous one. This is viewed as the underperformance for that company stock comparing the previous periods. For stocks trading in binary options traders should be able to use this earning reports factor and for this, they need to access the historical data. This is a limitation of earning reports. Moreover, earning reports are seasonal and it can be used only at the time of the quarterly season of earnings.
(3) Merger or Acquisition: In the question, the improvement of the companies’ competitiveness and standing is meant by the merger or acquisition. Usually, for the involved companies, they have positive impacts.
(4) Government Policies for Stocks Trading: Government policies have a clear impact on the stock prices. It can be positive or negative. The increase of import duties of raw materials for an industry can erode the margins of profit of the affected companies and oppositely its impact on the company’s competitive ability against the imported foreign materials. On the other hand, for the same companies, the waivers of import duty can enhance their profitability.
How to Trade Stocks in Binary Options
Identify the stock possible heading direction after the release of the news which affects the companies share prices. This is the first step. After that, you are ready to choose from any binary options trade type which fits your trading profile. For instance, the earning reports are able to lead you to the sustained responses which remain for many trading days. In this circumstance, you can choose Touch/No Touch option for trading, because it considers the resistance levels and recent supports for using accurate price barrier.
If in the market has very strong news release which causes a price spike in any direction of the company share price, then from the varieties you can choose to trade any high yield option. For example, the JP Morgan’s CEO announcement of trading losses incurred on their positions recently and this is the kind of news release which moves so strong that it is able to breach the high yield option type price barriers. It is completely up to you to determine what news releases suits you for your trading.