Binary Options

A buddy of mine turned me on to binary options recently.  It looks like an interesting way to play the market.  My basic understanding of it is that the time frame of expiration is reduced down to days or minutes and you have to decide whether the price will go up or down in that time frame.  The amount is not important, just the fact that the price went above or below your predicted price makes you money. 

To trade these without making it seem like gambling, you should watch the stock or currency to see what it does on a “normal” day to get a feel for the stocks tendencies.  I would definitely use all the regular techniques of moving averages, stochastics, MACD, Bollinger bands and volume to plan your entry and exits as well.

One company he checked out to handle the trades was Cedar Finance.  There are others out there that trade binary options.  He was focused on Forex and he made $200 the first few days trading around $50 at a time.  He lost all his gains however the following few days which should give you an indication of the volatility involved.  To be fair he is not a full time trader so I guess someone who watched the market more regularly could possibly make larger sustained gains from binary options.

Here's the website: 

http://www.cedarfinance.com/FAQ