Binary Options Trading Opportunities

Photo of author

( — January 2, 2017) — 2016 has come and gone, but the angst of major geopolitical shocks remains. These include the June 23 Brexit referendum, the surprise election of Donald Trump, and the ongoing political upheaval with the rise of nationalist parties in Austria, France, Germany and elsewhere. These events will redefine the political landscape, and cause a rebalancing of the economic arena.

What Trends are Likely to Prevail in 2017?

Investors are keenly watching the financial markets for news of the next big thing. Tech innovation is growing at a rate of knots, and companies like Google, Facebook, Apple, Microsoft and even Twitter are gearing up for increased digitization across multimedia platforms. We are seeing digitization taking place on a broad scale with the financial sector. This is true of banks like Bank of America, Wells Fargo & Company, JPMorgan, Goldman Sachs, Citibank and the like. Banks are saving money by removing money and paper from their internal and intracompany operations. The increased digitization of the financial sector is going to accelerate in 2017.

Binary options traders will take heart from the Fed rate hikes expected in 2017. According to Fed chair, Janet Yellen, at least 3 rate hikes will be adopted in 2017. Wall Street analysts believe the Fed is overambitious, and are anticipating just 2 rate hikes. Regardless, this spells opportunity for day traders and investors. If the Fed moves on the federal funds rate (FFR), the USD will be impacted. Any rise in interest rates is accompanied by increased demand for the greenback.

This will cause currency flows from Europe, Japan, Canada, Australia et al to flow into the US. Fixed-interest-bearing securities such as Treasuries, CDs, and other long-term investments will yield more for foreigners. This is a positive for US banks and financial institutions. Their stock prices will rise as their revenue streams will increase with higher interest rates. This will translate into improved yields and higher EPS for investors. To profit off these incremental increases in interest rates, it is necessary to select a binary options trading platform that is tried and trusted.

How to Profit off Financial Stocks with Binary Options?

Traditional investments require that the underlying asset must appreciate in value for profits to be generated. With binary options trading, traders simply need to anticipate the direction of price movement at expiry time. It doesn’t matter how much the price moves up or down; all that matters is that the underlying assumption proves correct. A fixed yield is generated on financial assets that finish in the money. This can be as high as 80% or 90% on the principal invested. And with binary options, traders needn’t wait lengthy periods of time for assets to expire. For this reason, many investors are now including contrarian investment opportunities such as binary options in their portfolios.

Among the many benefits of trading financial stocks in a binary options format on the following:

  • No Leverage or Margin Required
  • Low Minimum Investments per Trade
  • Greater Cash Flows since Money is Not Locked up in Long-Term Investments
  • Fixed Returns on in-the-Money Finishes and Limited Losses on out-of-the-Money Finishes

2017 is also going to be a critical year for indices trading. The Dow Jones Industrial Average is approaching an all-time record of 20,000. The bullishness in equities markets is a direct consequence of the expectations around a Trump presidency. Trump has promised a massive fiscal stimulus as part of his economic revival plan for the US. This will include large-scale infrastructure spending. As such, investors are bullish about multiple sectors including shipping, metals, construction, technology and others.

Cloud Technology Making Waves

Long-term call options on these sectors are generally perceived as secure investments. On the technology front, cloud computing is going to become an increasingly important aspect of the financial sector. Just recently in July 2016, the Financial Conduct Authority (FCA) of the UK authorised the use of cloud technology in the UK financial services sector. This is definitely something to watch as there is tremendous growth potential. This will be accompanied by a spike in big data management and analysis. Traders also want to keep an eye on digital currency options like BTC becoming more mainstream. Many binary options companies also offer BTC (Bitcoin) as an asset category.

The New Year is awash with opportunity, particularly in the financial sector. US banks, credit card companies and brokerages are excited about the profit potential with higher interest rates.