If you’ve seen “Love and Death,” there’s a quote there about wheat. As the story takes place in Russia, it is suitable for a country who is the world’s top exporter of grain.
Russia’s five-month drought brought a ban on wheat exports. As Russia is one of the main producers of wheat, this is has driven up the price of wheat to its highest in two years on August 5. The price of corn is related to the price of wheat, as both are used for animal feed. Traders who find that grain futures are soaring may instead choose to invest in soybeans and corn, although corn is rising along with rice.
What this means for you:
Traders might want to capitalize on this market trend for short-term binary options. Traders can place trades on wheat and hedge it with trades on soybeans and corn, perhaps more stable investments.
Operators might want to add more instances of commodities options to their sites for traders to benefit.
Binary options really came of age in 2008, with the addition of them to the Chicago Board of Exchange (CBOE) and the North American Derivatives Exchange (NADEX). Since then, their popularity has exploded among both the financial trading and gaming industries.
Once offered in these major financial exchanges, they became a part of the exchange market and brought government regulations and taxes.
In traditional trading, traders predict the precise value of stocks in the future, buying a contract for that amount. The expiration date can be set several months or weeks in advance. As the price increases or decreases, the owner of the future can buy more futures contracts or sell them. With binary options, contracts expire much more quickly, and traders simply wait out the trade until the time of expiry instead of buying and selling up until the time of expiry. Although it is much less flexible for traders, it is also much simpler. Some more experienced traders see binary options as a means for beginning traders to get experience trading in the traditional market. Then again, many experienced traders are now getting involved in the binary options market!
With its exponential increase in popularity we have witnessed the same principles of binary options trading applied to fixed-odds gaming on the weather, television shows, sports, and political events. There are hundreds of online sites with fixed-odds gaming of different teams and events from all over the world.
Binary options are an exciting new trading concept in the financial world. There are several reasons for its appeal:
- RISK MANAGEMENT: Traders know ahead of time their amount of possible loss or gain. The risk in binary options trading is less in comparison with more traditional trading. Binary options trading offer large potential gains with minimal loss. Markets Pulse gives traders an additional benefit by providing a protection rate of 15%, meaning that a trader cannot lose more than 85% of his investment in trading.
- SIMPLICITY: Binary options provide a great way for inexperienced traders to start trading. Traditionally, market trading has been done by those with deep understanding of finance and market change. Conventional trading involves gaining or losing money on investments based on the amount of increase or decrease in the price of assets. In binary options trading, traders predict the direction of the market. Binary options also have a much shorter shelf-life than futures trading or stocks. Traders make predictions on the direction of the market within a day, and sometimes within an hour.
- LESS REGULATION: The regulations for binary options trading are less strict than other conventional forms of trading. Binary options trading are available to anyone with Internet access, and options are traded round-the-clock. If companies find regulation to hamper business dealings, they can easily move offshore or to another location with less regulation.
- RANGE OF OPTIONS: Binary options offer a range of different products to trade- from financial instruments to sports and the weather. Currently there are a limited number of trade choices within binary options, but as time progresses and binary options become more conventional the trade choices are predicted to increase.
If you’ve seen “Love and Death,” there’s a quote there about wheat. As the story takes place in Russia, it is suitable for a country who is the world’s top exporter of grain.