trading GBPUSD using binary optionsTrading GBPUSD using binary options (Out of the Money binaries) nets $79 per contract.

Last night as I was watching the ACM Awards show, I noticed that the 45 minute GBPUSD price was near an ATR on the 45 minute chart. There was no buying volume. I looked at the Binary Options on the GBPUSD and there was one for the 1.4920 area. Price was around 1.4970. There was an OTM option available at 1.4920 (fifty pips away) or about 3 strike prices out available for $21. The key was how much would the GBPUSD move from 8:45 pm to 7am?

According to the chart below (click to expand), the average movement for the GBPUSD forex pair for the hours of 9pm to 7am should be: 170 pips

BP Average Hourly Movement

However, this was a Sunday with no market reports on Monday morning. For $21 risk, I felt that it could move at least the fifty pips.  If it moved in my favor, I would make $79.  The return on the investment would be 376% or a risk to reward of 1 : 3.76.  Looking at these numbers, I felt that it was worth the risk so I entered.

Trading GBPUSD Using Binary Options

At 7am, the option expired in the money (meaning it was less than 1.4920 and I made my profit.

GBPUSD Binary Option