How to Enhance Options Outcomes

shutterstock_138304802Investing in options contracts is a solid approach to growing wealth. After all, options contracts allow you to make an investment that pays even in a volatile and unpredictable market. As one article stated, “you can use options to profit in any kind of market. You can buy options in a speculative attempt to triple your money or as risk-reduction insurance to protect an existing stock position. You can sell options to generate monthly income, or you can use spreads to buy and sell at the same time — possibly turning a losing investment into a winner.” (InvestingDaily). And if you can use stock options in these many and varied ways, you can use binary options to accompany them and improve your outcomes!

Pairing Options with Binary Options

It is easy to mistake these two types of trading as the same thing simply because they both feature the word “options”. However, binary options are nothing like standard or “plain vanilla” contracts. Instead, binary options are a yes or no venture. For example, you may buy an options contract on crude oil, believing that you can exercise the contract at expiration to enjoy a good deal or make a favorable profit.

If you know the specifics about that contract and how or why it could pay out nicely, you can also use this knowledge in a binary options contract. However, the question you will have to answer with your investment will touch on the pricing or performance of crude over a specified period of time.

For instance, you purchase an option on crude because you believe it will exceed a certain price within the coming week. You can enhance the outcome of this investment by also purchasing binary options contracts that indicate that the price will touch that figure within the week. If, at any time, your prediction is true, not only is the regular option a savvy investment, but the binary option gives you a payout as well!

Insurance That Pays 

Many investors argue that standard options contracts are, for them, a form of insurance. They purchase them in case their stock or portfolio holdings lose value as it serves as a sort of hedge. However, that is not always the case. Certainly, some investors do use options as insurance, but many use them as a hedge and profit. When you apply binary options to this venture, you get protection plus earnings.

Profiting in any market, whether it’s a bear, bull or flat market, is possible when you rely on calls and puts in standard options contracts as well as binary options. The main trick is to do the research, identify the risk, and purchase options contracts as well as binary options that can balance out risk or offset loss. Remember that they are an investment and are not without risk. The goal is to use a trading strategy that protects the portfolio and does not put the entire investment at risk.