Trading binary options on Dow e-mini captures profits this morning. Although I was already short on a daily Dow binary option (Wall St 30 > 20800 short for $35.50 in risk), I also opted to enter the 10 am binary option when it opened at 8am.
Trading Binary Options on Dow
On the 3 minute chart, right before the opening 10am expiration (opens at 8am), price had tested the ATR and failed to break thru it. More downward market was anticipated. Since the Stochastics was confirming the lower highs in price, I entered a few strikes out at 20817 for $25.25 in risk per contract.
I immediately set a profit target at $15 (when shorting a binary option you always go lower than your price on entry). A few minutes after 9am my profit target was filled. The result was a profit of $60.50 per contract. Plus the daily is target at $15 is still pending.
The Out of the Money binary options provide an ideal environment for using low risk high reward opportunities. Since each binary has a maximum payout of $100, the trader has more reward (typically around $70 after the risk) than risk on the table.