Trading 20 minute binaries on the indices are quick trades that can be placed throughout the US session or on the Japan 225 during the Asian session. Since the Gamma (how fast price changes on an option) is high on these binaries, they are excellent choices for scalpers with the right setup. The 20 minute binaries are offered on the US Stock indices beginning at 9:40 am New York Time and ending at 4:00 pm New York time. The Japan 225 20 minute binaries begin at 7:00 pm New York time and end at 1:20 am New York time.
Trading 20 Minute Binaries on Indices
The 5-minute chart below shows the 20-minute binary for the Wall St 30. A three bar reversal to the upside has just occurred at the R2 Pivot Line. This formation indicates that price will move upwards from the pivot line as it is currently providing support. A long entry at the Wall St 30 > 19184 by 10:40am New York time strike was entered for a risk of $21.25 per contract, excluding exchange fees, with only 9 minutes and 38 seconds until expiration (red arrow with red box).
Since these premiums can jump around very quickly, a profit target is set at $70. If the profit target is achieved, a profit of $48.75 per contract will be achieved (excluding exchange fees).
As the chart below shows, with only one minute and thirty-six seconds remaining, price reaches up to 19187 (three points above the strike) and the profit target is filled.
The entire trade only lasted about eight minutes and produced a return on investment of 229%. However, it is extremely important to remember there was a very specific entry criteria met — reversal bar at an area of support and resistance. This makes the difference between simply jumping in anywhere versus have a defined trading strategy for entering and exiting a trade.
Futures, options and swaps trading involve risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results.