60 Second Binary Options
The 60-second binary options provide just about the shortest time scale options along with an adrenalin buzz and instant gratification on calling the market right.
60 second binary options are generally a type of Call/Put option trade that has an expiry of 60 seconds. The trader is taking a position on whether the asset will end higher or lower than the market price by the time the trade ends in 60 seconds.
Owing to the view amongst some self-proclaimed ‘experts’ such as Gordon Pape who has probably never been on a trading floor in his life, 60 second binary options are gambling. So what he imagines High Frequency Trading is, where computer driven buy and sell orders are entered into and exited from in fractions of seconds one boggles to think. What Pape really means to say is “I personally don’t have a clue which way the market is going in the next 60 seconds, let alone in the next 60 months”!
This view that these short expiry time frames are the demarcation between an investment and a bet are ludicrous and would inevitably mean that any tradeable ‘investment’ with a maturity date, i.e. bond or Insurance-Linked Security, or a conventional option traded on the CME on, say, the S&Ps automatically morphs into a bet, a gamble, within the last minute of its life. The implication would therefore mean that the instrument would therefore need both a financial investment license plus a gambling license.
The Japanese FFAJ have stated that the option needs to have an initial life span of at least one hour. Where this number came from, who knows. The Cypriot regulator have stipulated two minutes. Yet again a number plucked from out of the sky as opposed to generated by a credible thought process, with the by far shorter two minutes probably being driven by that country’s own need to attract business.
Which Brokers Offers 60 Second Binary Options Trades?
This would suggest that all brokers do that offer expiries of in excess of 60 seconds as at some stage they de facto have to see the option expire which means passing into the watershed last minute of trading.
Binary.com was one of the first brokers to offer 60 second binary options trades and they are still one of our top recommended sites. Learn more about Binary.com here.
Trading Outcomes of 60 Second Binary Options
There are three possibilities in terms of trade outcomes with the 60 second trade:
a) The trade can end up IN THE MONEY, which is a profitable outcome for the trader. All that needs to happen to make this a reality is for the asset to end in the trader’s predicted side of the trade by just one pip.
b) The trade can end up OUT OF THE MONEY, which is a losing outcome for the trader. If the asset dips into the side of the trade opposite the trader’s bet by just one pip, then the trade ends up as a loser.
c) The trade can end up AT THE MONEY, which is what happens if the asset ends on the same price level as it started the trade. This is a possibility as a result of the short expiry time of the trade, and unless an asset is in a massively volatile period, the price action generally ticks around a few pips range.
Trading 60 Second Binary Options
This option is found on the binary options platform of brokers who use the white-label solutions from proprietary houses, SpotOption and Tech Financials. If you have a brokerage account with any of these brokers, simply do the following to engage the trade:
a) Select the asset to trade. Any asset from the asset classes will suffice.
b) Enter the amount to be invested in the trade.
c) Is the asset going to end above the market price (CALL) or below the market price (PUT)? This is where you make your choice.
d) Execute the trade using the appropriate button.
Success with the 60 second binary option is enhanced when prices are very volatile. These conditions exist at the following times:
a) During news trades of a high-impact nature. Due to the fact that most traders would be in a particular direction during such trades, and brokers would only permit trades on volumes that they can match, you probably have to be in the trade very early. If you do not have access to an ultra-low latency news feed, then you are better off staying away from this trade.
b) When there is extreme market volatility triggered by a systemic market activity.
c) During the first few minutes of market open. This refers specifically to trades on stocks and stock indices. The Japanese stock index (Nikkei 225) mirrors the performance of the US indices, so you can use the close of the US markets to gauge the market sentiment during the first few minutes of the market trade in the Japanese index.
d) If you have access to a technical setup that uses ultra-short acting moving averages, you could use this for a successful trade. Such a system would really have to be very good indeed, and the trader has to trade off the 1minute chart.
Controversy Surrounding 60 Second Binary Options
The controversy surrounding this trade are reports of market price manipulations by brokers who tilt the scale against the trader by manual adjustments of the expiry price. This is more likely to occur if the price is at breakeven point at 59 seconds.
On the other hand, the providers of 60 second binary options have to contend with mainstream brokers with sizeable orders ‘front-running’ their order by placing a 60 second trade immediately prior to entering their market-moving trade on the main market.