Unlike classic binary options where basic assets are separate shares, binary options indexes are like a package of shares which are formed in a certain principle i.e they represent a complex of goods or shares. Binary option trading based on indexes has a big number of advantages. The first and most important is that it is capable of covering a few market segments/areas by only one or several transactions. In such a way, in order to understand how to trade binary options indexes and receive high income, one needs to have a look at financial instruments.
S&P 500 Index
Brokers sell binary options very easily and quickly because of the fast achievement of results – get an income. The basic asset of binary options is an index and in order to see how it works, let’s look at AnyOption platform. AnyOption includes 23 indexes. Most of all traders monitor indexes of American shares as they have a high share capital. It is called S&P 500 – it includes 500 largest US companies which take the leading positions in the main and most important sections in the industry. This particular index is capable of covering 75% of all American shares that include world brands among which: Apple, Google, hygiene goods: Johnson&Jognson etc.
Binary options strategy with a basic asset S&P 500 (e.g day trading breakout strategy) gives a trader an opportunity to invest money in a financial market without additional operations that require some funds. The strategies that are based on indexes suppose that traders are aware of the market development and movement in general, yet it doesn’t require detailed information about each and every separate share.
Apart from S&P 500, AnyOption platform offers such popular indexes as Deutscher Aktien Index – Germany, Financial Times Stock Exchange- Great Britain and many others.
When working with indexes, it is much easier for a trader to watch and monitor the price changes. First of all it is connected with the fact that indexes include the largest and most famous companies, the information about which is available for everyone. Minimum knowledge about minor shares price fluctuations and an investor immediately makes a decision to change the index. Such an easy access to information about price changes/fluctuations lets a trader make the right and weighted decision regarding the direction of an index options.
Binary options strategies based on indexes (e.g scalping trading strategy) are extremely simple and profitable. Such kind of trading increases the level of liquidity as it becomes more and more interesting for traders with each and every day.