Binary Options S&P 500, Entry

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Times are New York time.

I've opened a bullish Triple Fence spread on S&P 500 binary options. In the Triple Fence strategy, I open three positions each one strike price apart.

If the strike closest to the market price is out of the money, then the Triple Fence will increase the total profit, producing a lower risk/reward ratio.

If the strike nearest the market price expires out of the money, the other two strikes, being farther out, have a greater chance of expiring in the money, mitigating the potential loss.

S&P 500 (Nadex:US500) 10:51 a.m. entry: Long the >2068 strike for a $52.75 debit with the index price at $2076.23.

S&P 500 (Nadex:US500) 10:51 a.m. entry: Long the >2065 strike for a $62.25 debit.

S&P 500 (Nadex:US500) 10:52 a.m. entry: Long the >2062 strike for a $70.75 debit.

The chart below shows the Nadex strike of indicative 2068 positioned at the estimated equivalent index market price of $2,076.23. The Nadex indicative is the average of the 25 most recent trades on the exchange.

Click on chart to enlarge.

SPX at 11:25 a.m., 2 days 5-minute bars

The price dropped immediately after I entered. Elliott wave analysis suggests that the present wave 2 {-3} will shortly reverse to the upside as wave 3 {-3}, which will move above the peak of wave 1 {-3}, placing all three strikes in the spread in the money.

-- Tim Bovee, Portland, Oregon, July 6, 2015

References

My draft day-trading rules can be read here.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading. 

Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.

Alerts

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Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.Tss s ss'ss