A Crude binary option signal example is which shows how the binary signals work and how traders can utilize this information for entering binary options, including strike prices and expirations.
Crude Binary Option Signal Example
The Crude binary option signal that was issued via twitter was as follows:
Notice that the signal gives the trader the complete information for determining the trade including the Symbol, direction, price, minimum expiration, date and time. In this particular example, the signal is for Crude Light. The trader should try to enter at a strike price at or near 48.75. The absolute minimum expiration is 48 minutes. This signal came out today, June 13, 2016 at 12:12 pm New York time.
Now depending on the binary option broker, the trader can either choose the closest strike to 48.75 for a 1pm expiration or the trader can set the strike price (with some brokers) and then decide if it will go up or down. In this case, the price closed at 48.82 or “In the Money”, which means it was a winning trade.
Since price was at 48.75 on entry, also known as “At the Money”, the risk would be approximately $50. Since the binary expired in the money, with Nadex binary options, the payout was $100. This equates to a $50 profit (excluding exchange fees), since $50 was paid on entry. The return on investment was 100% (risking $50 to make $50).
With other binary options providers, the payout is whatever percentage they are paying. It can vary greatly from one provider to another.
Since I prefer the Nadex binary options, when I calculate the expiration, it is always using the Nadex model. Also, if a signal issues a minimum timeframe that is not available, then I simply bypass the trade. For example, on the signal above, if the only option available was a daily, then I would bypass the trade as it is from a lower timeframe (48 minutes to expiration) versus a higher timeframe which typically dominates.