Among the many benefits associated with trading binary options is the ability to trade with a wide range of assets. Each broker provides their own list of available assets, but the S&P 500 is included in most (if not all) asset listings. The S&P is an extremely active index, typically experiencing a large trade volume throughout the week, which means that it will present a large number of profit opportunities. This alone makes it worthy of consideration.
The past few years have been extremely active ones for the major U.S. markets, and the S&P 500 has been no exception. An economic recovery has been taking place, with the progress being made progressively clear via numerous positive economic data reports. General market sentiment has been positive as of late, with new record highs being set in 2014 for this index. Going forward, traders will want to pay close attention to data such as corporate earnings, consumer sentiment reports, interest rate changes, and more.
When trading binary options using the S&P 500 index, job creation numbers can provide excellent opportunities. When companies within an index are performing well, the number of new jobs added will increase. This in turn will improve investor sentiment and provide a boost in the marketplace. Similar reports should also be monitored, so be sure to have an economic calendar on hand. This calendar should provide not only the dates/times for the release of new information, but also projections in relation to the forthcoming data.
Although reviewing economic reports will certainly help with locating prime entry points, technical analysis should also be used to analyze price movement for the S&P 500, or any other index. Any type of instrument can be selected, but note that this index may provide an opportunity to utilize high-yield One Touch trades during times when market sentiment is extremely positive or negative. These trades typically remain open for a period of one week, which can work to the advantage of the trader by providing enough time for the asset price to reach the target price.
The S&P is open for trading five days a week, Monday through Friday. Its hours of operation are optimal for U.S. traders, but may present challenges for those who live in other countries. Within some binary options platforms, the index can be traded as a Future, with the contract purchased while the market is closed and the win/loss determination made once the market opens and the trade completes. Should you find it tough to trade the U.S. markets, consider Futures a viable option.
The basic trading strategy for this index will be to enter into trades when market sentiment is strong. There will be days when price movement is flat, but more often than not, the value of the S&P 500 is on the move. When trading binary options, the goal will always be to carefully and correctly select only the best trade setups. When monitoring assets such as the U.S. indexes, locating these optimal setups should not be a problem.