Binary options dubbed “turbo options” last between 15 seconds and five minutes. As with any short term bet, they hide a lot of risks, but are very attractive to clients for the entertainment value they provide. What happens when short intervals are used on charts is that, intervals between one and five minutes are very unpredictable.
The end outcome of binary options for these timeframes is hard to predict with standard indicators, as the periods are extremely short. We can argue, that turbo options is the same as short term trading, where forex and stock movements in such timeframes are just as hard to predict.
First a look at the technical side of the matter – turbo options need a steady flow of quotes (so that they can fulfill the promise of providing a quote at the beginning of the option and at the exact moment it should expire). Not all instruments have deep enough liquidity and this limits turbo options only to the most popular currencies, stocks and commodities.
Those who feel that these options feel more like a game of luck compare it to a roulette. There you just perform a simple task, by selecting something with two outcomes (like red or black) and wait for the ball to fall. It’s quick and easy, no need for a prolonged decision-making process. There is probability involved, as well as sequences and luck, but no moving force outside of them, like the drive of buyers and sellers.
Is it Time For Banks to Move Over And Create Space For Blockchain?Go to article >>
The argument that it’s still trading falls on the premise that the outcome is derived from market action. A miniaturized version of the markets that has its own specific quirks that need to be learned. But just like in trading, one can take advantage of mini-trends, reversals or support or resistance level price action.
this isn’t something new of course. Described as “tick trading” or with the slang “trading on the static”, extremely short term trades are an area that some traders venture into, but in relatively small numbers. This is mainly because it requires larger sums to keep your margin and is perceived to have larger risk levels that don’t comply with any sort of fundamental analysis. Add to that the sharp moves in different directions (which definitely don’t look so sharp when you’re looking at an hourly chart) that test your mettle quickly and vigorously, and you have something for the more risk tolerant.
Theoretically it can be even more profitable than riding a single winning trade for the same amount of time. For example someone manages to win 4 successful trades that lasted 1 minute each, banking a 78% profit four times. Someone else might have also guessed correctly the direction and the moment to enter the trade at the exact same time, but his/her profit is nowhere near 312%.
It seems the question doesn’t get a clear answer. With elements of both trading and gaming-like setups, turbo options are the extreme version of binary options. In the end traders themselves will decide what they really are. More importantly, it will be their call if they’re useful for whatever entertainment or profit they’re looking for.