By Darrell Martin
You may have noticed that the markets have been a little volatile lately. A little? Okay, maybe a lot! If you trade binaries or spreads, you probably also noticed that it pushed the premiums pretty high. Instead of complaining about it, collect it! Don’t be mad about something like that!
If premiums seem so high, you can ask yourself, “Why don’t I go the other direction?” In a volatile market, you want to be the premium collector, not the premium buyer. The collector is the one making the money while the premium buyer is the one losing the money.
In order to be the collector, you can buy lower than the market or sell higher than the market. Doing so will help you make some decent money, then the market doesn’t even have to move and you make money. If it moves in your favor, you make money. If it stays flat, you make money. If it moves against you a certain amount, you can still make money. Three out of the four scenarios, you can still profit. The only one that could hurt you would be if the market moved too far. In this volatile market, time value with is you.
Another thing you may find is amazing “bargains” on spreads. On October 15, 2014, Darrell Martin was talking with Tom O’Brien on TFNN. Martin showed a possible spread trade that would be similar to a trade you would find if you were placing one hours before, probably the night before you really wanted to enter it. This, however, was 40 minutes before expiration, near the end of the trading day.
This type of trade is an Iron Condor where you would buy the lower spread and sell the upper spread. You have the potential to make $40 on each side for a total of $80. But you only have an eight point width to go against you by $8. Anything else is profit. This is a 20-25 percent return on the Russell in 40 minutes!
Volatility pushes the premiums up, but instead of complaining, you can be collecting. If you would like to know more about trading Nadex spreads and premium collection, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 8000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.