Crude Oil Trading Binary Options

Rough oil (CLV14:NYM) is currently testing a bullish PRZ (potential reversal zone) for an Alternate Bullish Bat, the longer toll holds to a higher place 92.27, the higher the probability of retracement mode attempt. This has a target of 93.34 and scaling signal, aka a potential rejection point, at 92.68. I consider 92.68 a directional bias shift level because a hold above at that place invalidates a bearish cross and increases probability of testing 93.34 or higher.

A hold below 92.27 has initial target of 91.fourscore for a retest of the bottom of the PRZ. A break down of 91.80 has the extended targets 91.48, 91.23 and 90.73, and so these become targets and potential bounce points one time price arrives in that location.

And then, watching cost behavior at the underlying CL price of 92.27 offers clues as to which targets have a higher probability of being tested.

Given that view, that’south translate it into a viable trading strategy using Nadex listed binary options. We’ll use the daily options that elapse today (September 9 10.45EDT) at 2:45PM EDT.

At the risk of stating the obvious, the reader will not be able to replicate this strategy exactly. What I am doing here is demonstrating the efficacy of Nadex listed binary options by way of a real time example.

We consider 92.68 to be a fundamental support level which, if penetrated, will pb to a farther decline. With CL currently at 93.25 there is a daily binary with a settlement toll of 92.fifty.

The market in that binary at this writing is 90 bid and 92 offered. This means that the market place as a whole believes that at that place is bwtween a ninety and 92 percent gamble that CL volition be above that level on expiration.

Given that binary options settle at either 100 or zero we will sell the 92.50 binary at 90. This ways that we chance $10 to make $90.

At the same we’ll wait at the binary option with the same settlement time and a settlement price of 93.l. The marketplace in this option is currently thirty bid and 32 offered. Nosotros’ll buy this selection at 32.

This gives u.s.a. the following scenario: A close in a higher place 93.50 makes the position $58 every bit both binaries settle at 100.

A close below 92.fifty makes the position the same $58 as both options elapse worthless.

However, if CL is between 92.50 and 93.fifty at 2:xxx the position loses $42 every bit the short binary settles at 100 and the long binary settles at zero.
All the same, the trade risks $42 to make $58, a better than fifty-fifty money bet, in just a piffling less than four hours time.