Spreads Vs Binaries


#1

Which one of these are best for trading high impact news on the 2 hour time frames? I do not plan to trade straddles or strangles. I just plan to use directional bias with a $25 stop loss. Which one is best for this strategy? Also, is getting in 30 minute before the news open a good idea?


#2

If its a NTM Spread or a ATM Binary at around $50. You would most likely get stopped out of the binary sooner and it wouldnt even have to go 25 ticks against you.

With the spread. and a $25 stop loss… the market would basically have to move that much against you. With the binary, would probably have to move less.

There can be a bit of movement before any news event… so you run the risk of getting stopped out even before the news event if placing the trade 30 minutes prior.

If you dont want to do a strangle/straddle… it may just be better to wait until after the news event for the next signal. There can quite a bit of uncertainty with trying a purely directional trade with a news event.


#3

Okay, nice insight thanks. So do you think that it’s best to get in maybe 10 minutes before the news comes out, or as soon as they come out?


#4

You want to be in trade before the news event takes place obviously, or you run the risk of the trade taking off without you.

Would say closer to 2-3 minutes before… that way you have a little bit of time to make sure you actually get in the trade, as well as to set your stop loss/ take profit orders.