Trading the Dow Binary Option with a Daily Expiration at 16430 Using an Out of the Money (OTM) Strike Price produces a nice profit. Earlier this morning, I forewarned everyone that was subscribed to the Binary Option Signals group that a binary trade would be coming in on the Dow Jones. I expected price to go down and test the Average True Rang Stop on the 45 minute chart and then resume the uptrend. I specifically told everyone to watch the 16321 area on the Dow as this would be the area that made the difference today,
Trading the Dow Binary Option
Around 12:30 pm New York time the trade came in and I notified everyone of the trade via the Skype chat room that the trade had come in:
“I am going long on the Dow daily expiration 2 strike prices out at 31.75. The 140 and 720 are both showing a potential upside move and the 45 minute is holding right now. These were not available earlier and the price is currently at 28.75.”
The strike price using an Out of the Money binary option is 16430. Of course the beauty of using binary options to limit your risk allows you to abandon the computer for the duration of the trade since you limit the risk on entry. And that is exactly why I used the binary options because I could not be at the computer for the duration of the day. Therefore, I placed a profit target at $63 and left the office.
The profit target was filled resulting in the return of the premium (risk) and a profit of $31.25 per contract. Plus, there are no commissions for binary options. Instead, traders pay an exchange fee, which is quite cheap for trading binary options (only $1.90 roundtrip if trading less than ten contracts).
Total Profit for Today Trading 1 Contract with 2 Trades Setups was: $70.75 (excluding exchange fees)