Market Overview

Trading Corn Binaries On The WASDE Report

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Each month, the WASDE (World Agricultural Supply and Demand Estimates) Report is released. This report generates quite a bit of movement, but the direction is unknown. This is the time to place a strangle on binary options.

A strangle strategy is entered when a trader buys an upper binary contract and sells a lower binary contract. Of course, more than one contract can be done at a time. However, make sure that the contracts are equal on each side of the trade.

By using the strangle strategy, a trader was able to make $121.20 in a few minutes. Four Corn (Jul)>376.0 @11.75 contracts were bought and four Corn (Jul)>366.0 @ 84.75 were sold. The >376.0 contract was sold to close @60. The sold contracts lost $61, but when doing a strangle, one side of the trade is expected to lose. The following image shows the trader’s transactions for this strangle.

The risk on the four bought contracts was $47. When you subtract the risk and the $61 loss from the $240 settlement payout, this trade profited $132. After the fees of $10.80 are subtracted, it is evident how the trader profited $121.20 in a short time.

 

Posted-In: Binary Options News Education Eurozone Futures Commodities Options Forex

 

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