Putting Your Spread to Bed Part 2

Putting Your Spread to Bed Part 2

In part one, we talked about what goes into the settlement of a spread.  We learned how Nadex figures the settlement value on futures for their binary and spread contracts by taking the last twenty-five trades, dropping off the top five and the bottom five, and then averaging the middle fifteen.  It’s also nice to remember that Nadex calculates the settlement value by using Reuters data feed, primarily, on forex and futures prices. Reuters is considered the standard in data and this ensures you get a fair settlement value on your contract. In this article, we’ll look at an example of a spread settling.

Let’s say you were watching your charts, looking for the perfect set up to trade. You find a spread that has a floor of $75 and a ceiling of $80.  You are able to buy at 75.25.  Your risk is only 25 ticks which is $25.  It has an expiration time of 2:30PM, so you have time on your side.  The chart below shows the many opportunities you have when trading this spread.  As always, when trading on Nadex, you can exit at any time before expiration.

To view chart, click HERE.

As shown above, you may have set take profit at a number of different places.  The first example shows that you chose to get out at 76.10 which was 85 ticks for a profit of $85.  The second example shows that you held it until it reached 78 and you got out with a whopping $275 profit!  You might have sold at 76.60 for a profit of $135 or if you had the plan to hold it all the way to expiration, you still had a fantastic profit of $175.  It is important to make your decisions based on your charts and whatever strategy you are using.  You need to have a plan that you stick to, but also watch for exit points, if the market isn’t going in your favor.

To learn more about how to trade binary options in-depth and for binary options signals, trading strategies, tools and trade rooms see ApexInvesting.com.

Posted In: Binary OptionsEducationEurozoneFuturesCommoditiesOptionsForexSuccess StoriesMarketsTrading IdeasGeneralapexinvestingbinarybinary chartsbinary optionsbinary scannerbinary signalsdarrell martinday tradinghow to tradenadex binariesNorth American Derivatives Exchangepremium collectionscalpingspike strikerspread optionsspread scannerspread settlementThe Better Betweekly options
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