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Bearish Strategy

As with any financial decision, your goals need to be understood before embarking on any financial endeavor. We recommend thoroughly understanding what you wish to achieve before setting out and trading any financial instrument. Although with binary options risk levels are well defined before a trade, it is still wise to employ a strategy based on analysis of the market.

Here we will explore the strategy known as a bearish strategy, that along with the bullish strategy, are the simplest of all strategies.

If after analyzing the market (using fundamental or technical analysis), you come to the conclusion that the asset you are analyzing is likely to head downwards, you may wish to employ a BEARISH strategy.

Based on the fact that you have at your disposal an ABOVE/BELOW option type, you can simply click a PUT option (or a BELOW option) based on your prediction.

Trading Example:

Based on your analysis of the technical charts of the EUR/USD, you believe a the market is headed downwards in the coming hour. You see the current price of EUR/USD is at 1.3850.

After seeing that the payout on EUR/USD options is 75% at your broker, you can employ a bearish strategy by choosing a $1000 PUT contract (or below option) with a 1 hour expiry. If you are correct, and the price of the EUR/USD rises even .1% over that period, you will be in-the-money and realize a profit of 75% or $750.

 

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