If you anticipate volatility in a particular market, or even if you don’t, you can benefit by trading one of our volatility products: Binaries and Options.
Forex broker Canada has developed a suite of products to allow our clients to trade on volatility itself rather than instruments in the underlying market. With these products, day traders can take short-term views on markets such as the FTSE 100, Wall Street, GBP/USD and even individual shares.
Best Canadian Forex Broker List
easyMarkets
Blackbull Markets
Eightcap
ForTrade
Avatrade
LegacyFX
FXCC
FPmarkets
FX Choice
Our volatility products – called Binaries and Options – are easy to understand, quick to initiate and offer almost immediate returns as most are set to expire at the daily market close. You can buy or sell volatility, and you can take both short-term and longer-term positions. These innovative products offer an exciting spin on traditional CFD trading, where the instrument is volatility itself rather than a particular index, forex pair or individual share.
How does volatility trading work?
One of the benefits of volatility trading is that even if you are not sure which direction the market will shift, but you do believe there will be significant movement, you can still profit. All you have to decide is whether the market price will move, and how much, regardless of the direction. When you buy volatility, you are simply forecasting movement away from the present price (in either direction), and so you can profit whether the move is up or down.
Alternatively, you can also sell volatility if you believe the market price is going to stay within a set range either side of the present price. In this way you can even make profit when you anticipate very little activity in a particular market.
With Forex broker Canada you can trade volatility using either Binaries or Options. See our Volatility Examples for an idea of the volatility strategies at your disposal.
Volatility trading with Binaries
We have developed a range of Binary types across various markets. There are numerous benefits to trading volatility using Binaries:
Potential for dramatic change
As a market approaches expiry, the value of a Binary can increase by several hundred percent in less than one hour.
Strictly limited risk
You cannot lose more than the initial margin you pay to open your position.
Wide range of markets
We offer a wide choice of Daily and Weekly Binaries on world stock indices, currencies and commodities.
Continuous dealing prices
We quote a continuous price until very shortly before the underlying market closes. So you can close your position without waiting for the market settlement.
Go long or short
You can buy or sell any Binary we quote.
Commission-free
The only charge is the dealing spread.
For more on Binaries see the Binaries section.
Volatility trading with Options
Similarly, there are numerous strategies to employ using Options CFDs when trading volatility. Despite seeming quite a technical product, Options can be very simply used to take advantage of market volatility, or lack thereof.
If you believe a market is going to be volatile on a particular day, or over the next few weeks, you can take advantage by using Options to trade on the volatility itself, even if you aren’t sure which direction the market is going to move.
Options strategies
For example, if you expect volatility in a particular markets, you could ‘buy’ paired Call and Put positions either side of the current market level. If the market breaks in either direction, you’ll lose your premium on one side but profit on the other from the potentially unlimited market volatility you predicted.
Options are offered at a range of different strike prices, and you can make an Option trade in either direction. The price of an Option is based on the level of the underlying market in relation to the strike price, the time remaining until the Option expires and the volatility of the underlying market.
You can trade out of your Option position at any time or wait until it expires. Our Options are always cash settled, so physical delivery will never be a concern for you.