The Four Fathers of Binaries – Stocks

Trading Binary Options Stocks: Facts

Apple, Microsoft, Exxon, Mobil, Facebook or McDonalds are all companies that influence our everyday lives. There’s a big chance that you are reading this article on a computer that uses Microsoft or Apple operating systems, you probably have a Facebook account and if you drive a car, you know what Exxon is. All these companies have one thing in common: we can buy their stocks and even better, we can trade Binary Options with their stocks as an underlying asset. The term of “Stock” refers to the initial capital invested in a company by its owners. The whole stock of a company is divided into shares (usually the plural form – stocks – is used as a synonym for shares) and owning a share means owning a fraction of that company. However, when we are trading Binary Options we are not buying stocks; we are just placing a Call if we think the price of a certain stock will go up or a Put if we think it will come down. Binary Options can be traded on stocks of major companies that are listed on the stock exchange. Of course, another basic condition is that your broker offers Binaries on those companies, but usually a wide variety of stocks are available for trading through most of the Binary brokers. Other frequently traded stocks besides the ones already mentioned above, are Google, Vodafone, British Petroleum, Coca Cola and Intel. Binary Options on stocks can be traded only when their respective stock market is open, unlike Binaries on currencies or commodities that can usually be traded around the clock during the working days of the week. Your broker will inform you about the exact trading hours in the Asset Index section of their website. 

 

 

Trading Stocks: Effects

 I talked about a stock going up or down, but let’s see what makes a company’s stock price fluctuate. And the answer is… Supply and Demand, just like in the case of commodities and many other financial assets. If Demand is high for the products made by a company, this will lead to more income and profit for that company and given that share prices are directly influenced by the company’s economic situation, they will go up. To simplify, if a company performs very well the price of its shares will probably go up. If the company is in financial trouble, the share price will go down. The way for us retail traders to gauge how a company performs is by keeping a close eye on their Earnings Reports and also any news that can affect that company. Hypothetically, let’s assume that Apple announces that they will release a new iPad with 3D capabilities. Nice thought, I know. Once the new iPad is released and it is indeed a competitive product, a lot of gadget lovers will rush into the Apple stores to get their hands on one. But what do you think that will do to their stock price? It will most likely bring it up because now everybody is interested in Apple and buys their products which will eventually be positively reflected in their sales numbers and earnings reports and a well performing company has a high share price.

 

Of all the assets available for trading Binary Options, probably stocks are the most appealing to the new trader because usually brokers offer for trading the stocks of big, well known companies. Since almost everybody has heard about those companies, you don’t need to be a financial wizard to find out if and when Google launches a new smart phone or if Facebook accounts will require paying a monthly fee.

 

 

My Best Advice on Trading Stocks

Keep an open mind and don’t let your trading be influenced by your own opinion of a certain product or company. I am going to make it clearer: like I said, it is very probable that we are using some of the products of the companies we are trading. Without question, we have different opinions on different products: if I chose to buy an iPhone, then I consider it better than the Galaxy phone from Samsung. And here comes the unconscious mistake that we must avoid: never allowing yourself to become biased towards a certain stock just because you use and love the products of the company. It might seem like something that is not worth mentioning and you could say “Yes, of course I am not going to place Calls on Apple just because I like the iPhone”. Your subconscious can make you do weird things; if you already like a product and on top of that you earn some money from trading that company’s stock – so only good things came from your “relationship” with that company – you will somehow become emotionally involved and you will potentially give unnecessary importance to a small but positive event related to that company.

 

 

High Profile Stocks Info and Trading Tips

Apple Overlook

Trading Exchange: NASDAQ

Trading Hours: Five days/week, during NASDAQ trading hours (9.30 am – 4.00 pm ET). Your binary broker might have different trading hours for this asset so check with them for the exact times

Brokers offering Binary Options on Apple: Almost all major Binary brokers offer binaries on Apple

 

The best tip I can give on Apple in 50 Words: Apple had their share of mistakes and defective products. Remember the iPhone problems with the antenna or the horrible blunder with their Maps app? Since they are a world leader in consumer electronics, all eyes are on them and even a small mistake can lead to a drop in share price.

 

 

Google Overlook

Trading Exchange: NASDAQ

Trading Hours: Five days/week, during NASDAQ trading hours (9.30 am – 4.00 pm ET). Your binary broker might have different trading hours for this asset so check with them for the exact times

Brokers offering Binary Options on Google: Almost all major Binary brokers offer binaries on Google

 

The best tip I can give on Google in 50 Words: Although Google is the world leader when it comes to search engines, any new developments coming from their direct competitors like Yahoo or Bing will affect Google’s stock price. Competitors are also looking to “steal” some of their employees and these transitions can be detrimental to their stock price. For example Marissa Mayer, Google’s Vice President of Search Products and User Experience left in July 2012 to become Yahoo’s CEO. Ouch, that’s a low blow.

 

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