Today we propose a simple strategy to maximize profits linked to buying binary options. The strategy is easy to apply and is to purchase first a call and then a put, or vice versa.
First of all buy a binary option, such as a call, and then wait for the market to move in the desired direction. Suppose that the underlying is an Apple with starting price of $ 560.
If over time the Apple is appreciated, for example, reaches $ 570, it means that is in the money, so in profit.
Wait for the option to come nearly to expiry, at which point, if the underlying starts to show signs of decline, we may even think of buying a put with the same underlying at a price of about $ 570. In this way, if the option comes down in price to the quotation of $ 570, according to our expectation, but remains within the range $ 560 $ -570, both investments will close in profit with a very high gain.
It’s really impossible, apart from exceptional cases, that in the last minute Apple will lose more than $ 10 price.
If Apple continues its growth and exceeds $ 570 we close the call option in profit and the put in loss, with a loss very limited, in fact, put investment is recovered from the profits of the call (usually 70% -95%) and the partial repayment of the call (in fact, some brokers refund up to 15% of the capital invested in options expired at a loss).
To maximize the strategy we act in this way: We buy call on 24option or OptionBit where the performance of an option High / Low arrives to 89%, while purchase the put with the same underlying on Anyoption.com (or a another broker of your choice that has the same characteristics) that pays a lower profit, normally 70%, but reimburses 15% of losses.
Doing rapid calculations: If in our case the Apple remains within the price range $ 560 $ -570, we get a profit on the call of 85%, and 70% on put. However, if the action continues to grow and exceeds $ 570, with the call we earn 85% while with the purchased put on Anyoption.com recover 15%. In short, the risk of loss is limited to 4%.
Of course you have to invest in stocks that are traded on both brokers and use the Straddle strategy only where the underlying has moved compared to starting price, in a decisive way, so as to operate within a good range of price.