Products is the most manifold item of purchase and sale in the world. But the most quoted and strategical products assets are shown as financial instruments in the commodity exchange. The most well-known metals, energetic recourses (oil, gas, fuel oil, coal), foodstuffs (beans, corn, soya, wheat) and other groups of products, which are less popular in our time are sold and bought very well in commodity exchanges of all countries in the world. The most popular energetic recourse of nowadays, which is sold and bought in commodity exchanges, is oil. Its popularity constantly grows, and oil wars happen not only in the world, but also on the exchange trading platforms.
On the screen there are quotations of crude oil of Brent trademark (the classification of the USA commodity exchange) – it is a very volatized instrument, which is influenced by geopolitical situation in the world, wars and acts of terrorism, which can weaken oil production industry of big countries.
Products assets are less popular among traders, than companies’ shares, and depend on each other directly. For example, shares quotations of big oil extracting corporations are in direct correlation to trading of oil in commodity exchange.
Thus, products assets are popular among the main stock market speculators, and also among traders, who use in products trading web-terminals and also for binary options trading. More than that, such kind of trading development as “binary options” lets many market speculators get more profit from trading in commodity exchange.
Why? The answer is that products trading by binary options overcomes futures trading in profitability and efficiency, but futures have been more popular in commodity exchange recently.
How do products differ from other financial assets?
- good liquidity and not less volatility (especially as for seasons products);
- direct dependence on economical and political situation in the world (especially as for energetic resources);
- commodity exchange has a wide choice of financial instrument for trading;
- many items are into direct correlation and they also connected with commodity exchange assets directly.
Binary options for products
The technology of products trading doesn’t differ from another assets trading. However, products have some peculiarities, which other instruments don’t have:
- many products depend on season. Thus, traders have an opportunity to make long-term purchases and sales, investing their money from one month to half a year.
- Inter correlation of products with shares, currency and indices gives an opportunity to a trader in binary options trading use hedging and differentiate his own risks by creation “portfolios’ for trading.
Strike price – this condition binary options took form futures. However in technology of binary options trading, the usage of strike-levels is able to give profits more than its predecessor. As a trader for one deal, betting on price achievement of prognosed in advance level, can earn to 600% from the sum of the contract.
Option type – PUT и CALL. Trading conditions, which are characteristic for exchange type of trading, as a product like other financial assets, is the object of purchase and sale. On the practice, this option is used in the following way:
- if, in the result of market situation analysis, a trader saw oil position to local growing, he closes a deal - Call-option;
- if a trader, during the trading market analysis, found a pattern of currency pairs (GOLD/EUR) to a position to local lowering, he closes a deal -PUT-option.
Expiration date – such condition of contract with binary oprions is applied to all types of the given type of trading. All binary options have expiration date, when the profit and loss are fixed in open position. Taking into account that terms of expiration of binary options can be from 30 seconds to half a year, this kind of trading is considered to be the most progressive and on the whole is suitable for assets of commodity exchange trading.
How to trade by trading assets?
First of all, it is necessary to pay attention to the political and economical news in the world. As a rule, oil and gas are included in trading terminals. These groups of products are influenced by macro economical and global news from the world.
Statistics, which is published every month, about the rest of primary resources in the place of their extraction play an important part. The given factor plays often the decisive role for behavior of the given products in commodity exchange. As the lack of resources leads to quick purchases (the main consumers store supplies, being afraid of similarity) and vise versa – surpluses lead to lowering in price and sales.
At the same time, binary options trading for oil doesn’t exclude the using of another strategies, which are based on the estimating of technical indicators (indicated strategies) and trading on clear graphics (non-indicated strategies, according to Price Action type).