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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.

This strategy is called gaming the news ticker.

You want to make the most out of your trades.

Is there a way to place trades knowing in advance information that makes the likelihood of you profiting from the trade higher than those without this information?

No, we’re not talking about inside trading. We’re talking about responsible  research on market indicators. You should research your favorite stocks and  securities to find out when they report their quarterly earnings.

Place trades right after an official earnings release statement. Do your research on  whether or not an instrument has usually fallen or risen after an earnings report.

For how long does it rise or fall? How quickly? By how much?

Place your trade accordingly. This is information a responsible trader has that   many don’t bother to research. Research them and you will be ahead of the game.

This strategy benefits you mostly when you have two options with a range of expiry, where both options could be in the-money. Then you are able to minimize your risk but   also maximize your gain.

This option is almost most popular in forex binary options, in which the value of the currency can change very quickly in either direction. In this scenario, hedging could be a viable option for reducing risk to the trader.

Take the following scenario of a forex binary option based on the price of the Euro. The Euro has been rising and is predicted to continue to rise at a determined breakout point. At this point you would place a call, expecting the Euro to rise. But what if the price changes quickly and falls? You can place a put option at another point, helping you to minimize risk in the event that the price indeed falls.

In the above scenario, you have placed a call for $500 at the option price of 5.1. You have also placed a put for $500 at the option price of 5.3.

The following outcomes could occur:

• The Euro price could expire at 5.1 exactly, making your call option at-the-money. You would receive $500 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $850 on your initial investment. Total investment= $1000. Profit= $350. This trade would end up being a net gain. (-500 + 500 + -500 + 850)
• The Euro price could expire between 5.1 and  5.3, making both your put option and your call option in-the-money. You would receive $850 for both trades.  Total investment= $1000. Profit= $700.   (-500 + 850 + -500 + 850) This trade would end up being a net gain.
• The Euro price could expire below 5.1, making your call option out-of-the-money. You would receive $75 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $850 on your initial investment. Total investment= $1000. Profit= – $75.   (-500 + 75 + -500 + 850) This trade would end up being a net loss, but you still lose much less than you stand to gain in other scenarios.
• The Euro price could expire above 5.3, making your call option at-the-money, and you would receive $850 in return of your initial investment. In this case your put option would be out-of-the-money, and you would receive $75 in return of your initial investment. Total investment- $1000. Profit= -$75.  (-500 + 850 + -500 + 75) This trade would end up being a net loss, but you still lose much less than you stand to gain in other scenarios.
• The Euro price could expire at 5.3 exactly, making your put option at-the-money. You would receive $500 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $850 on your initial investment. Total investment= $1000. Profit= $350.  (-500 + 850 + -500 +  500) This trade would end up being a net gain.

In each scenario, you stand a chance of winning a greater profit by hedging, or placing two bets in opposite directions, than the all-or-nothing chances of one binary bet. In the instances in which you stand you lose money, you lose far less than the possibility you have to gain a greater profit than loss in other circumstances.

Binary no-touch (also called a lock-out)- A binary option in which the trader only receives payout at expiry only if the binary never reached or extended beyond a predetermined price before expiry (known as the touch barrier). For example, if an option of 20.00 is traded for $222.32 as a binary no-touch option and predicted that the price at expiry will not reach or fall below the range of 17.32. The price of the option either reaches or falls below 17.32 and the trader loses all but $33.35 or the price of the option never reaches or falls below the pre-determined price of 17.32, and the trader receives his payout of $377.94.

This is a good trade for instances in which a trader predicts resistance in an option breaking above a certain price, but expects that the option will not fall below a certain price.

Binary double no-touch (also called double lock-out or range binary)- A binary in which the trader only receives payout at expiry only if the binary never reached or extended beyond either of the two predetermined barriers.

For example, if a trader buys a double no-touch option at a price of 1.43 with 1.44 as the upside barrier level and 1.23 as the downside barrier level. The option moves during the trade period between 1.28 and 1.435, making the trade “in-the-money.” The trader receives his payout.

Had the option broken either barrier, trading over 1.44 or falling below 1.23, the trade would have been out-of-the-money and the trader would not have received his payout.

Double one-touch- A binary option in which the trader receives payout at expiry if the binary reaches or extends beyond either one of the two predetermined barriers. If neither barrier is touched at the time of expiry, the trade is out-of-the-money and the trader does not receive a payout.

For example, if a trader buys a double one-touch option at a price of 5.45, with 5.49 as the upside barrier level and 5.41 as the downside barrier level and the option reaches either beyond 5.49 or below 5.41, his trade is considered in-the-money and payout is received.

This is a good trade for instances in which an economic report is due to be published and the trader believes it will affect the price of the option in one direction or another. It is especially popular in the forex market.

One-touch (also called Lock-in or Touch Digital)- A binary option in which the trader receives payout at expiry only if the binary reaches or extends beyond the predetermined barrier.

Traders use this option when they expect the price of an option to reach a certain amount, but are not sure that the option will remain at that amount. This type of option is especially popular in the commodities and forex market.