The Oil Trades You Missed This Week with Binary Options

The Oil Trades You Missed This Week with Binary Options

If you’ve been following the Oil market this week then you know it’s been a wild 72 hours of trading as news of a planned OPEC deal to cut production has spurred a dramatic rise in the price of Crude and given bulls some much needed energy. What kind of trades were available at the start of the week in the binary option market on the Nadex Exchange? Let’s take a closer look at some of the trading possibilities available with defined risk.

The Oil Trades You Missed This Week with Binary Options
The Oil Trades You Missed This Week with Binary Options Getty Images

The news of an OPEC deal broke early Wednesday morning with a planned production cut of 1.2 million barrels a day, which boosted Oil prices about 7%. And that momentum continued into Thursday with additional gains. The possibility for volatility this week was obvious to most traders with OPEC news having the potential to break both sides of the market.

Here is a chart of the indicative index, which is based off the NYMEX January Crude Futures prices, as of Monday night at approximately 6:30 p.m. ET. Along the right axis are the weekly binary options available, which expire Friday at 2:30 p.m. ET.

The Oil Trades You Missed This Week with Binary Options

With the underlying Crude Futures trading at about $46.85 at the time there were a variety of possible trades to choose from, all of which would have defined risk coming into an expected volatile week for Crude.

Now, let’s fast forward to this morning around 7:30 a.m. ET. With OPEC announcing a deal and Crude Futures exploding to the upside, the market has obviously shifted dramatically in the span of the last 72 hours. Even after giving back some of its gains of the last few days, Crude is still up about 10% on the week.

The Oil Trades You Missed This Week with Binary Options

While not every binary option to the upside looks like it will expire in the money, you could have also chosen to take profits after the market showed a possible top Thursday afternoon. You can always trade the binary options prior to expiration. Here is a snapshot of the same market on Thursday at about 3:30 p.m. ET, with about 23 hours remaining until expiration of the weekly binary options.

The Oil Trades You Missed This Week with Binary Options

You can see the extra value in some of the higher strike point binary options yesterday as with compared with this morning. This is both because of the extra time remaining as compared with this morning, and also that the market was about $0.40 higher at the time.

You wouldn’t have had to necessarily be correct in predicting the direction of the move, as there is always the ability to buy a binary option above the market while simultaneously selling a binary option below the market. When initiating this type if multi-leg trade you can benefit from volatile moves in either direction, while still keeping your risk defined.

The next time you see a market, commodity, or currency setting up for a big week of news and volatility consider weekly binary options on the Nadex Exchange. Anytime markets are moving with volatility is a great time to try out a demo account with practice funds to see for yourself the types of trades available and how they react to underlying moves.

Note: Exchange fees excluded for calculations.

The information contained above may have been prepared by independent third parties contracted by Nadex. In addition to the disclaimer below, the material on this page is for informational and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Please note, exchange fees may not be included in all examples provided. View the current Nadex fee schedule. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representations or warranties are given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk and any trading decisions that you make are solely your responsibility Trading on Nadex involves financial risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results. Nadex instruments include forex, stock indexes, commodity futures, and economic events.

Nadex binary options and spreads can be volatile and investors risk losing their investment on any given transaction. However, the limited-risk nature of Nadex contracts ensures investors cannot lose more than the cost to enter the transaction. Nadex is subject to U.S. regulatory oversight by the CFTC.