An intraday trading is a marketplace where the traders need to book their positions on the same closing day. As the term reflects, an intraday trading means a day trading where the market shuts down on the same day and no position is carried forward for the next trading day. Thus, the traders step into this market with an only purpose of making a great profit in a single day and therefore, it is not a right trading market for the investors with the purpose of investment. For sure, anyone can make quick money from this market, but, one thing makes it the most complex and unpredictable market, which sometimes can put the trader into great loss as well. Hence, to avoid the losses, traders can apply stop loss. The market analysts advise that the traders need to constantly keep an eye on the fluctuating value of shares, but, with stop loss order, they don't have to actively track the share values. It is one of the intraday trading tips to follow stop loss because the order is triggered automatically once the share price reaches the target of either profit or loss. Once the price reaches the target price, the stop order becomes a limit order or a market order. Hence, stop order can be applied to limit the loss in this unpredictable and volatile day trading market.
Stop loss limit order:
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I like to think of myself as an entrepreneur. I’m actually an accountant by profession, but really an entrepreneur at heart. Being an accountant is ok, but like any job working regular hours for someone else, it has it’s drawbacks.
For example, I often get tired after lunch so wish I could take a short afternoon siesta, to perk myself up for the rest of the day (they even say that people who do this live longer, but that’s another story). So it was often during those “after lunch” hours when I was pushing myself to concentrate on numbers when I just wanted to float away into dreamland, that my heart would wish I had the freedom to do as I pleased, when I pleased.
Then I found option trading.
I went to a seminar run by a guy named Nik Halik back in July 2002. I remember it was a pretty full-on weekend and very motivating. I came away from there, feeling like I had found what I always wanted to do. With the discovery of option trading, my whole view of the sharemarket changed. I realized that, when properly understood, options provide the advantage of flexibility that ordinary share trading does not. This is because options have so many more variables than just buying and selling shares – and you can use these variables to your advantage.
When you buy shares, you simply buy at a certain price and hope to sell it for more. But options have “strike prices”, “expiry dates”, ‘implied volatility”, “in and ‘out of’ the money” factors…. all of which allow you far greater flexibility in adjusting your position as you see the market direction forming. When buying shares, you simply buy and hope you’ve got it right, but with options, if the market turns against you, you can always salvage your position. Some options can also be purchased as a form of “insurance” on shares you already own.
The other advantage with options is that you can buy different types of options, depending on your view of market direction. If you think the price of a share will rise, you can buy a call option, but if you think it will fall, you can buy a put option.
But the “wow” factor with options really comes into play when you realize that you can also “write” or “sell” an option contract, in a way that allows you to create it out of nothing. Then if you start combining the buying and selling of different option contracts on the same underlying share, simultaneously, you are talking “spreads”. Spreads can be either debit (ie. they cost you money) or credit spreads (ie. you recieve a net credit to your broker account from the deal).
If a share price action is narrowing into a small range and you feel it is going to break out soon, but don’t know which way, you can take an “each-way” bet. You buy an equal number of call and put options with the same expiry date and wait for the move. When the share price breaks out, the move is usually large enough so that the profit from the winning option pays for the losing one and gives you a nice net profit.
I’ve done very well with options. I tried trading CFDs for a while, but found them very volatile and inflexible instruments. I would often be right on my general expectation of market direction, but was “stopped out” before from intra-day fluctuations before the move took off. You can avoid this with options and go on to make your profit.
Options are beautiful things.
Categories: Uncategorized Tags: buying shares, greater flexibility, market direction, money factors, option contract, option trading, options depending, options provide, prices expiry, properly understood, share price, share trading, sharemarket changed
(PRWEB) February 17, 2011
Binary Options Asia has today announced the introduction of a new binary options trading platform offering Asian traders the opportunity to make a return of up to 85% in under an hour.
As the name implies, 'binary options trading' simply involves picking one of two possible outcomes, and receiving a fixed, pre-determined payout if your prediction is right. In the case of Binary Options Asia, it means betting on whether the price of the underlying asset – such a share or commodity – will rise or fall over the course of an hour.
For example, if you think China Mobile shares are going to rise, you can buy a $100 'call' option for a potential 85% gain. If, at the end of that hour, China Mobile's share price is higher than it was when you placed your trade, your $100 becomes $185 – even if the shares only went up by a cent.
With the ability to trade from as little as $30 and no commissions, it is an easy and affordable way for Asian traders to access the financial markets.
Unlike margin foreign exchange or Contracts for Difference (CFDs), which also involve betting on market movements, there is no borrowed money involved in this form of trading. Nor does it matter how much the investment goes up or down – only the direction matters. That means the amount of money you can lose is limited to what you put in so you do not need to worry about margin calls, using stop orders or constantly monitoring your positions.
On Binary Options Asia, traders who make losing bets actually have up to 10% of their investment returned to their account.
Asian traders are able to gain exposure to a range of popular currency pairs, stocks, indices and commodities on the Binary Options Asia platform – all on one account.
To take advantage of this innovative online trading platform, visit Binary Options in Asia.
Binary Options Review Asia: Binary Options Asia is a trading name of Market Punter Pty Ltd (ACN 137 016 490) who are authorized and regulated by the Australian Securities and Investments Commission.