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Binary Options Trading - How To Use A Protective Put

Much to everyone's surprise trading binary options online is similar to gambling in various ways. Of course, you can say that the whole options game is one big crap shoot and you would probably be right. But binaries are different. The whole concept is similar to a hi-low game of cards. You don't really need to predict the price range, just the general direction of the trade - meaning up or down.

Now, say you are checking out your Japanese candlesticks chat and you see that BT-A.L is taking a second consecutive dip and the pattern indicates it will peak, on the other hand the UK statistics on unemployment came in and you believe it will have a negative backlash on profitability.

So, much like black jack - if the dealer has an Ace, the house lets you buy insurance. I seldom use this technique on Black Jack, but when I trade I use it to mitigate risk. So the protective put is basically a type of insurance the broker lets you buy if you want to insure your trade because you are not sure.

It is also used by traders very commonly when making multiple trades on "safe" trades as well as high risk trades. This method allows them to take risks but really minimize them and make higher profit margins.

Generally speaking its just one of many techniques I use when I trade binaries online.