Trading S&P 500 Futures with Nadex 20-Minute Binary Options

By Joseph Banegas
Binary Trade Group

With the recent volatility in the market place, trading the US Indices with Nadex  20-minute binary options requires a strong opinion about the direction of the market and the dexterity to take profits quickly or exit if a trade is moving against you.

Nadex offers 20-minute binary options for trading futures on four of the major US Indices:

• US 500 (S&P 500)
• Wall St. 30 (Dow 30)
• US Tech 100 (NASDAQ)
• US SmallCap 2,000 (Russell 2k)

In today's trade, a 20-minute binary option was placed on the US 500 index for the time period of 11:40am-12:00pm EST.

As the markets were ranging, especially the US 500 (S&P 500 Futures), I decided to look for an opportunity with the 20 minutes binaries. The /ES was brought in from 30m to 15m, 5min, and finally to 1 min.charts on my ThinkorSwim platform. The chart showed many signs of a decent uptrend. 

• MACD positive and rising
• More advances than declines
• Volume speed steady in an uptrend
• S&P 500 Futures (ES trending sideways)

Let's take a look at this trade on my thinkorswim (TOS) platform: (February 12, 2015):

Click on Chart to Enlarge

With the decision made to BUY, the next step was to go to NADEX and place the trade. A 20-minute Binary was selected with a 12:00PM expiration at 11:41am.

Trade Details: 
Contract: US 500 >2073.25 (12PM) 
Expiration: Thu Feb 12 12:00:00 EST 2015 
Direction: BUY 
Quantity: 10 
Price: $86.50

10 Contracts were bought, with a maximum risk of $865 and a maximum reward of $135. This is normally a little bit high for my personal taste, but the strike price of 2073.25 was so deep into the money that I felt justified in letting these contracts ride until expiration.

The market moved straight up and never threatened the strike price of 2073.25 before expiring  in the money at 2077.75 at 12noon.

The contracts settled in the money at 12:00pm EST, yielding a gross profit of $135, less $18.00 in exchange fees for a net profit of $117.00 in less than 20 minutes. 

Click Chart to Enlarge

About Joseph Banegas:

Joseph Banegas is an official trader and educator with The Binary Group (BTG). He trades mainly Binary Options using the NADEX exchange. Additionally, he makes LIVE Calls on opportunities for members of the BTG private Facebook group on a daily basis, along with other BTG instructors.   BTG provides new and experienced traders with daily training sessions for trading Nadex Binary Options.training, and has helped so many in honing their trading skills.

More information about the Binary Trade Group:

Website: http://www.binarytradegroup.com

Free Nadex Education Reminder:

• Thursday, Feb. 12  Advanced Trading Strategies (Part Two) 8pm-9pm CST Register Here
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The Purpose of this Blog

The Inquisitive Trader will be used  to share my experiences as an investor getting back into trading the markets. In June 2014 I joined the staff at TradingPub, and I am responsible for helping to book speakers for free webinars. Each week, I am exposed to a wealth of information from leading industry experts who teach how to trade the financial markets. When I come across interesting trading strategies, I will summarize my thoughts and share a link to the archived webinar. As I develop my own trading plan, I will also share some of my personal successes and failures. Responsible comments are welcome, but to avoid flaming posts and spam, I will be moderating all comments. I hope you find this blog useful, and wish you the very best on your journey trading the markets.

Disclaimer

The opinions expressed in this blog are solely those of the author, and should not be construed as trading advice. I am not a registered or certified financial planner. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. All individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.