For those who prefer fast-paced trading or who want to trade as many options as possible in a short period of frame, the newly introduced 60 seconds options might be the right choice.
These 60 seconds contracts are simple high / low options that will expire automatically 60 seconds after they were bought. In order to trade these options successfully, one needs strong nerves and must be able to think and act quick. It is also important to have a look at the chart for the period of a few minutes before the option is bought. This can be helpful to determine whether the price of the asset will go up or down in the next moments.
Why trade 60 second binary options
Trading 60 seconds binary options provides the opportunity for traders to make substantially larger profits that using the same timeframe with traditional forms of trading. This is due to the fact that binary options do not rely on the degree that price moves away from the entry price, as is the case with traditional trading, but instead only requires price to move fractionally higher than the ‘strike price’. Whilst even the best momentum traders purchasing tradtional stocks, currency or commodities rely on price to move even a few points, plus the brokers spread, binary options can return up to 85% of the initial investment if price closes just one pip higher or lower.
Sixty second binary options have emerged as a popular way for traders to consistently make profits throughout the day. The are particularly popular for technical trades who spot patterns indicating a sudden rise or fall, and for those momentum traders who trade news releases. These traders look for price to suddenly increase in volatility before purchasing binary options and hoping that the momentum in the the market caused by this lasts at least sixty seconds. Alternatively, when markets become wildly ‘oversold’ or ‘overbought’, this group of traders will take opposing positions in order to catch the market correction and hope that these options will expire in the money as a result.
One of the great things about sixty second binary options is that they are not entirely reliant on momentum and therefore almost any underlying asset is suitable to trade with these options. This includes currencies, stocks, commodities and indices.
The risks of trading sixty second binary options
Before buying a 60 seconds option, you have to be aware of the risks. The return – usually about 70% within one minute – seems to be very high. But bear in mind that because you can trade many options in a very short period of time, you could quickly lose your money. Also, the payout is usually about 10 to 15% lower than with comparable standard high / low options. This means that the extra thrill of speed will cost you extra money in the long run.
Of course it is possible to use charts for technical analysis. However, even if you identify a possible trend, it might take longer than 60 seconds before the price of the underlying asset will move in that direction. This will mean that while you made the correct analysis but still lose your investment. For inexperienced traders, it is usually better to stick to binary options which have longer times to expiry. This can make it easier to anticipate the future movements of the price. And the return is usually higher.
Think about it: 60 seconds options are a new trading instrument for one target group: the gamblers. Real investors have a much longer holding periods of assets. But gamblers want to see more or less instantly the results of their gamble. This is what makes these 60 second options so thrilling. But keep in mind that the risks are high. And due to the rather low payout of only 70%, the expected return of each trade is at -15%. This makes it very difficult to earn money in the long run with this product, even for very experienced trades. On the other hand, there is no other binary option with such high possible returns per trade in relation to the holding period of just one minute. So if you are ready for a quick gamble with your “play money”, try it out.