How to Invest in Gold When Trading Binary Options
How to Invest in Gold When Trading Binary Options
June 1, 2012It’s common knowledge that commodities are used in order to minimize risk and as a way to diversify the stock portfolio because they are considered to be a relatively low risk form of trading. But why do investors flock to the gold during times of high volatility? I mean you have Copper, Corn, Silver, Oil, & so on…The answer is simple, as opposed to other commodities, lets say oil for example that is more prone to market demand and fluctuates accordingly, gold is a sure way for investors to make sure their money keeps its value and is not devalued in any way due to inflation, bad government policy, or imprudent fiscal policies implemented by the central banks.
If you have $100,000 today that you want to make sure that in 20 years your grandchildren will receive the equivalent value, one way to guarantee this is to buy gold and hold on to it. Now, how does this come into play when trading binary options? OK, so lets check out OptionBit for example, which happens to be one of the best binary options brokers these days. If you check out the asset index you will see how much you would pay for an ounce of gold bullion. The traded type of gold bullion on OptionBit is Comex, which along with Gold Spot are the commodity names used by the markets.
Now, lets say you believe the current crisis in the Eurozone will cause a general recession and despite the fact that historically investors flock to gold to guide them to success, your candlesticks analysis tell you that the market is taking a general downward trend. In this case you can click the below button and risk a certain portion of your initial investment, let’s say 20%. Lets say the contract expires at 23:00 and gold has taken a dip below the red line. This means you are “in the money” and will get back your original investment + 20%. Meaning, If you deposited a total of $1,000 for example, and placed a below or “put” call you would have gained the $200 + an additional $200 and increased your bank roll accordingly.
If the contract expired “out of the money”, it means that investors held on to Comex because they believe it to be a solid long term investment and you would have lost those $200. Now, it’s plain to see what’s going on in Greece and why the Euro has been devalued against the greenback, so if you are serious about making money trading digital options and want to diversify your investment portfolio with commodities, I highly recommend you take a good look at some of my binary options broker reviews and start formulating a hedging strategy based on signals and in depth analysis, news & updates, and research.
If you believe you have done enough research and would like to start trading gold at OptionBit simply Click Here.
Incoming search terms:
- optionbit
