In the last few years, traditional stock investors have started to look at some alternatives when compared to their normal buy and hold positions. Some of these choices include areas of the market like forex and binary options trading, so we are now seeing a much wider range of choices when we look at the ways traders are able to express their views on the market.
But what many newer traders might not realize is that these alternative investment forms can actually be paired together in a single position. So, for example, if you want to open a binary options trade using currency pairs you will actually be able establish a position in both the binary options market and in the forex market — all at the same time. Here, we will look at some of the ways this can be done.
Puts and Calls
To trade both forex and binary options, you will need to look at the currency pairs made available by your broker. Market authorities like Ultimate4Trading can be highly useful in these areas. Some of the most popular forex examples here include selections like EUR/USD, USD/JPY, and the GBP/USD. These pairs can then be used as the asset vehicle through which to express a binary options trade.
When binary options traders are bullish (positive) on an asset, they will buy CALL options in that asset. When binary options traders are bearish (negative) on an asset, they will buy PUT options in that asset. This is essential terminology to understand if you are going to start placing binary options trades. Without this, it can be very easy to mistake your actual position and lose money in the process.
So for those looking for ways of combining the power of multiple markets in a single trade, this is one possibility. When we use the binary options market to trade currency related assets, we can see that modern markets have moved far beyond the traditional start where we would only buy and sell in simple stock positions.