The conclusion of each financial quarter will bring with it plenty of opportunities to profit from binary options trading. There will be various other opportunities throughout the year, but quarterly reports are known to shift investor sentiment and cause trending prices which can easily be capitalized on. Each company that is publicly traded is responsible for updating investors on their financial progress. It will be these updates, or reports, that you are a trader want to be on the lookout for.
There are four quarters per calendar year, with each consisting of three months. Not every company is going to release their report on the same day, but most offer up this information during periods known as “earnings season”. During this period, expect to see new earnings reports being released on a daily basis. There is no need to guess about the dates and timing of the release of this information, as an economic calendar can provide you with all that you’ll need to know.
The strategy itself involves planning out binary options trades in advance, with the price movement prediction being based upon the actual data. Positive reports tend to cause stock prices to increase, while negative data is likely to do just the opposite. There will also be times when the data is positive or negative, but not so much so that it causes a huge shift in market sentiment. When this happens, price trends are unlikely. However, the movement may be enough that it allows for at least a few profitable trades to be executed.
There are several different binary options instruments which can be used to trade along with financial reports. The standard Put/Call trade is a fine choice when the price is generally moving in the same direction for a period of time. For short-term movement, a quicker 60 Seconds instrument could be selected. Should the report cause both buying and selling, resulting in range-bound movement, a Boundary or Range trade would be the optimal choice. The bottom line is that there exists an instrument for all types of price movement.
Earnings releases do have the power to impact various other assets at times. A prime example would be an index, which is valued based upon the stocks contained within it. Should several stocks within an index be on the decline, the index itself will be pulled down along with them. There can be a ripple effect that should be noted, just the same as how the performance of one major market can impact that of another. Take the time to note these important connections, as they can play a role in the analysis process.
At times, the window for entering into a trade based upon an economic release may be brief. The most significant impact is likely to be noted soon after the new data comes out. For this reason, advanced planning will certainly be helpful. Consider noting the key releases of the upcoming day, along with the earnings numbers predicted by market analysts. It will be these predictions that investors will refer to when determining just how well a company is performing. Better or worse, it will remain possible to earn from binary options regardless of whether the price movement is up or down.