Ladder Trading

The Ladder is a trading tool that allows the trader to make multiple predictions on a particular asset and expiry time, while analyzing the corresponding payouts and profits. As oppose to classic Binary Trading (chose, analyze, invest), with the Ladder, a trader can select multiple options for the same expiry time that are deep “in the money” to gain a few % points in a “safer manner”, or choose an option that is “out of the money” to gain a potential return that can reach up to 1500%.

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A trader gets a range of price levels, which are lined at equal intervals, such as on a ladder. The trader assesses whether the underlying asset price will close above or below the pre-determined price level at the expiration time. Ladder Trading can also be defined as “Target”. The trader has pre-determined target levels, for which they assess whether the target will be fulfilled by the expiration time.

 

To exit from a trade early, the trader just presses the button Sell. Ladder offers the trader a price to close his position early, based on a statistical matrix that calculates: option trading rules, time to expiry, market volatility, and target price. The selling position is available up to 5 minutes before the presented expiry time. Ladder offers the trader a price to close his position early in a 3 seconds window. Approving will sell the option, Canceling will keep the position with the trader.

 

The Ladder enables the client to:

 

  • Predict if the rate will be above or below a specific rate, entitling customers with corresponding payouts
  • Profit from market volatility
  • Benefit from classic UP / DOWN trading
  • Have several predictions on the same asset
  • Earn various payouts, depending on the risk they decide for the specific asset

 

More about Ladder Trading

Binary options is one of the best investment strategies for those who want to speculate the market and take advantage of the fluctuations on prices to earn a profit. But this type of trading has a lot of forms, and one of these is ladder trading. Option500, your trusted platform for binary trading, is here to show you what it is, how different it is from other types of binary trading, and how to start doing it.

Definition

Your success in binary options ladder trading depends on many factors including flexibility, external analysis such as the market climate, and technical knowledge. It got its name from the choices both the trader and the broker. Unlike other forms, with this one, you will receive various price levels, all of which have the same gap from one another. For example, you will have 60, 65, and 70. These price levels may be referred to as rungs like those found on the ladder. Each of these will also have an expiry date and a percentage of yield, which will be determined by the broker.

As an illustration, let’s pretend you want to trade JPY/USD for the following strike prices: 60, 65, and 70. Their expiration will be 9:45am, 10am, and 10:15am, respectively. You can also write it this way. The yield, meanwhile, is 20, 30, and 40 percent. You can also write it this way for clarity:

Strike price 1: 60 at 9:45am, 20%

Strike price 2: 65 at 10am, 30%

Strike price 3: 70 at 10:15am, 40%

*The yield percentage depends on a lot of factors that the broker should consider.

How do all these numbers work? At 9:45am, if you’re trading above 60, then you will get 20 percent yield from the trade. At 10am, if you hit above 65, then you will receive 30 percent, so on and so forth.

Fair Warning

Ladder trades are not for the faint of heart, and it’s not often recommended to those who are new in binary options. This is because it’s a complicated process. It demands your in-depth knowledge on how the market works and, most of all, how to predict the movement of prices, which isn’t easy to do. For instance, you need to know the pivot areas, which can change the way prices move at any given period. When you know this, you can already have a better idea if you’re about to make a yield or not.

If you’re just starting, you might want to do One Touch, which can be quite similar to ladder trades as you also try to set expiration and set your strike price. Needless to say, ladder trading does have some benefits, which traders like you should not miss.

What You Get from Ladder Trading

If this kind of trading is not easy, why should you learn it, more so use it? The answer lies on what you get from it.

It helps you offset possible losses when the value of security falls in the market. After all, you have more than one chance to earn a yield. Further, as a trader, you feel more in control of every transaction. You set the strike prices and the expiration, for example. This can be advantageous in a way since you’re forced to perform analyses yourself. Note, though, not all brokers may allow you to set these items.

The ladder trades also don’t stop you from selling your options even before the expiry arrives. This is especially necessary when you can already see the market is not in your favor. Lastly, it can shield you from not earning anything since you can also speculate whether the prices of a commodity will go above or below your set strike price.

How to Score Big

As in any form of trading, your biggest concern is how to maximize your profit, and when you’re speculating, that is one hard thing to achieve. When you’re doing this kind of binary trading, you have two options: set those strike prices and time close or not. If you want to earn large payouts, then setting them apart from each other is a good ladder strategy. However, remember that bigger payouts also mean higher risks, which means the chances of not hitting can also be very high.

The Best Tool

As mentioned, learning and doing ladder trading is not for everyone, and beginners may struggle with it. But you can make the investment and learning process easier and faster when you use a ladder option tool.

Option500 is a broker platform that provides you with everything you need to do binary options the easy, fast, and correct way. It includes a ladder trading option, where you can set your strike price and expiration. The program will be the one to calculate the best possible yield for the price levels you indicated. You can also identify your speculation, which can be above or below.

The platform gives real-time market data for a comprehensive and accurate technical and fundamental analysis. It can also feed experts’ notes and other recommendations to help you navigate this type of binary trading.

Speculating is not easy, more so if some money is involved. But as a trader, earning a profit isn’t the ultimate goal. Rather, it’s maximizing your earnings while significantly reducing or offsetting your losses. Ladder trading helps you achieve that.

Try Ladder strategy on Option500 platform trading today and find out why it’s the tool you’ll ever need for binary options trading.

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