Profit Taking on an ATM or OTM Trade

OTM and ITM trades are great for profit taking! The one and only ‘sure’ thing we know about binary options pricing is that when the underlying price matches your strike, the price is right around the ’50’ mark.

Remember a few modules ago, you learned the basics of binary options in 27 minutes? If not, go review that before you go any further.

Now lets take a look at a chart and pick a strike to buy. We want to see an example of how likely profits can be realized, depending on how far the market moves. In the picture above, if we bought the strike at $22.25 and price moves up to the yellow line (which is the strike) then how much of a profit are we sitting at?

$50 minus $22.25 = $27.75

This is limited risk. You are risking 22.25 to potentially make 27.75 if price merely touches the strike. It doesn’t have to close above the strike. It only has to touch it. After it touches, and you book a profit, you could not care less about what price does after the fact because you already booked a profit.

You can close your trade at any time you wish during the course of the trade. If you choose to get out early, this is possible.

Getting our of trades early is a wonderful thing. Sometimes price will shoot up like a rocket and you can be in and out of a trade in 4.3 seconds! Other times, you may have a trade on and then some news starts breaking. You can close that trade early if you are no longer comfortable with the position.