ConceptUp/Down binariesTouch binariesChained option contracts
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Chained option contracts
Traders have the possibility to automate part of their binary trading activity using a special functionality - chained option contracts. It allows traders to use two types of strategies: Winning and Martingale.
Winning is a follow-the-trend strategy, one of the most popular in binaries trading. If the trader recognizes a trend and starts a Winning chain, the system will automatically place a new contract with an increased amount (equal to the payout of the previous contract) every time the previous contract expires in-the-money. In case of Winning chain with 3 contracts, the trader risks only the amount of the initial contract, but has the opportunity to earn 12 times more if all contracts will finish in-the-money.
Visualized examples below demonstrate possible outcomes of a CALL (Up) binary option with a linked Winning chain of 4 contracts. The example assumes that the payout ratio is 90%, which might not be the case at all times.
Martingale strategy doubles the contract size if the previous one has been unsuccessful. When a Martingale chain is linked to an option, the system will automatically place a new contract for an amount twice larger than the previous one if and as long as the previous contract expires out-of-the-money. If at least one contract in the chain is winning, it would cover previous losses and make the chain end up with a profit.
Visualized examples below demonstrate possible outcomes of a CALL (Up) binary option with a linked Martingale chain of 3 additional contracts. The example assumes that the payout ratio is 90%, which might not be the case at all times.
The maximum length of each chain is limited to 4 contracts and traders can manually stop continuation of the chain before each new contract turns into executing status. Note that the Martingale strategy can considerably increase the investment size/trading losses – up to 15 times as is shown in the above example. For more details, please refer to the trading conditions.