Trading binary option Pairs

There are a number of innovations in binary options trading that no longer simply make it about trading a single underlying asset higher or lower. Conventional binary options are making way for new ways to trade which are equally as straightforward but potentially much more rewarding. For those with some market knowledge and insight in to the short-term direction of price, features such as ‘range options’ as well as One Touch  allows traders to use this knowledge to spot profitable opportunities. In addition to this, another new form of binary options trading has emerged and is likely to become increasingly popular throughout the next few years.

Understanding Pairs options

This new form of trading is called Pairs binary options and allows traders to pit two assets against each other in terms of relative performance. This works in a similar way to traditional binary options but in the case of Pair Options trading a trader will, for example, select a pair of stocks and predict which one of these will outperform the other over a set period of time. The time period is flexible, as with normal binary options and the pay-outs are also similar with most Pair Options brokers offering in the money options up to 85% profit.

How to trade with Pairs Options

It is easy to see how Pair Options will be attractive to those traders who specialise in trading a single asset class such as stocks or currencies. Using their knowledge it becomes highly profitable to be able to spot those pairs where outperformance by one of these has a high probability. There are two ways to trade the relative performance of these asset pairs and this is provided by fixed pair and floating pair binary options. Fixed pair options allow traders to simply plot one asset against another over a fixed time period; usually a number of hours or over one day. Performance is measured from the start of the investment and at the expiry time the asset which has performed better will be determined.

Floating pairs, on the other hand, can run on for weeks or months and traders can cash-out of these options early. They are priced based on the start of the chosen time period, such as the beginning of a given day, unlike Fixed Pairs which measure performance from the moment that the trade is opened. For this reason, it is not uncommon to see highly divergent pairs offering huge profits of up to 500% to those traders who back the underperforming asset within the pair.

Where can I trade Pairs Options?

There are a number of emerging platforms which offer Pair Options alongside regular binary options and the demand for this feature is clearly growing. There is also a dedicated platform, StockPair, who specialise in offering markets for these options as well as the more conventional binary options.  With a huge range of asset pairs to choose from, Stockpair has quickly become the industry leader in Pairs trading and is a good choice for both new and experienced traders looking to profit from relative performance of stocks or currencies.