According to recent reports, the U.S. economy grew at a rate of 3.2 percent during the third quarter of the year. That’s the fastest that this economy has grown in about two years, and it could be the biggest signal yet that the U.S. Federal Reserve will raise interest rates in mid-December.
As should have been expected by binary options and stock traders everywhere, the U.S. stock market moved very cautiously in response to this news. The three major U.S. based indices rose, but in a very small way as official data was not released until after the markets had closed. Dow Jones Industrial Average rose by 0.12 percent, the NASDQ rose by 0.21 percent, and the S&P 500 rose by 0.13 percent. These were all after days of upward movement, right after many indices saw record high prices. Although the previous day prices had backed off of these high points, prices were still attempting to push forward. However, because of uncertainty over what the U.S. government would release, prices only moved slightly.
Days like Tuesday, November 29, make it hard to trade binary options, or stocks of any sort. Prices tend to move in an oscillating manner, meaning they go up and down all the time, but when uncertainty about an upcoming announcement looms, it makes that oscillation more erratic. If you focus on timeframes over 5 minutes in length, it can be almost impossible to predict what will happen. When trading in a situation like this, 60 second ultra short term trades end up being the best tool for some traders because it takes oscillation into account, squeezes the timeframe you are looking at into an easy to decipher chart, and keeps your risk level down on open and exposed trades. They aren’t for everyone, and they can increase risk in some cases, but this is a situation where those who never look at this expiry might find benefit to branching out, especially if it is an asset that they have a lot of experience trading in already.
Previous estimates from economic analysts stated that the economy would grow, but at a rate of 2.9 percent. The reported growth was larger than expected, and economists have scaled back their forecasts for the current quarter to just 2.0 percent. Moving forward, the economy is expected to grow anywhere from 2.0 to 2.5 percent over the course of 2017. This estimate takes into account any movement by the Fed of interest rates, which is a very positive sign.
In fact, because of this estimate and expected future growth, binary options traders are in a very nice position. Prices of major indices are expected to drop by the end of 2016, but over the course of the next 12 months, they are projected to rise by that 2.0 to 2.5 percent. For those that prefer to start hedging their trades early in the year, right after the first of the year, long term trades on indices and certain individual U.S. based corporations will be far more likely to improve than normal.
Yes, there are always unexpected risks involved with long term binary options. If your broker offers yearlong expiries and you want to trade these, check and see if they have any sort of stop-loss measures that you can take advantage of. Most brokers don’t offer this, but some do. Even if it means losing 90 percent of what you initially risked, this is better than losing 100 percent. Hopefully this will not happen or even be likely to consider, but having a backup plan just in case is always smart.