Options trading on Deriv

Deriv offers a variety of options types that you can trade on where you don’t need to own the underlying asset:

Digital options

You predict the outcome from two possible results and earn a fixed payout if your prediction is correct.

Lookbacks

Your payout is determined by the highest or lowest price point during your contract’s duration.

Call/put spreads

You earn up to a predetermined payout depending on the market price when your contract expires.

You can trade digital options on forex, commodities, stock indices, and our synthetic indices which are available 24/7, including weekends and public holidays.

Meanwhile, lookbacks and call/put spreads are available exclusively on synthetic indices.

Deriv offers multiple platforms to trade options — DTrader and SmartTrader are powerful user-friendly trading platforms, while DBot and Binary Bot offer the tools you need to build your own trading bot even if you have no coding experience.

Complete the few-minutes registration form here and start trading Options with Deriv.

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Just a couple of decades ago, trading in the financial markets was not supported by such a powerful computer base as it is now.

Transactions were made by traders on a phone call to their broker.

With the development of new technologies, online monitoring of the charts of traded assets has become available.

Now many traders have a great opportunity to make short-term transactions.

It was binary scalping that allowed traders to conduct trading operations, the execution time of which (or expiration time) is in the range from 30 seconds to 5 minutes.

The essence and advantages of the scalping strategy for options

Beginner traders are often interested in how they can predict further price movement (up or down) for the next few minutes.

It turns out that this is quite real. Profit can be obtained from the smallest price fluctuations.

Throughout the trading day, any asset usually makes 2 or 3 significant movements in one direction or another.

However, there are many up and down price ripples that allow scalpers to make a decent income.

Knowing this, some not entirely decent brokerage companies in every possible way prevent their clients from conducting such short-term transactions.

But scalping options are quite available from serious and time-tested brokers.

For beginners, such short-term trading is very useful for acquiring certain skills:

• There is an moment to quickly and skillfully make decisions in extreme situations that are often encountered in financial markets;
• The trading platform and its capabilities are being studied quite quickly;
• In a short period of time, novice traders receive their first profit.

This is very important as options scalping can give you even up to 80% profit in a day. And it can be obtained by trading with a minimum expiration time.

Such trading will be profitable when using a certain balance of computer indicators. When using this set, it is important to follow a clear logical algorithm of actions.

Here are the main conditions for the successful application of the scalping method for options trading:

• Major currency pairs and gold should be the instruments for such trading, as they are highly volatile (this is very important);
• Trading timeframe should be equal to one minute or five;
• Trade should be in the European or American session;
• Risk management must be applied;
• You should take seriously the selection of a broker who is an intermediary between the trader and the market;
• The choice of expiration time depends on the current market situation.

It should be added that there are various ways of options scalping: with or without indicators.

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Options scalping indicators

Although many traders consider short-term options trading to be a very risky type of trading, the use of proven indicators in it reduces the risk many times over.

The most reliable indicators from the general list of tools include the following:

• A pair of exponential moving averages with periods of 5 and 10;
• Relative strength index (RSI), settings are used by default;
• Stochastic Oscillator with settings 14, 3, 3.

The listed set of indicators is quite common and acceptable with a scalping strategy for any trading platform, including options broker software.

The pair of the above exponential moving averages plays the most significant role.

Their intersection reflects a change in short-term trends. It is this moment that is the main factor for entering a trade.

RSI acts as a filter that displays the results on the screen of the trading terminal relative to the important level 50.

Stochastic is an additional tool designed to be a confirmation of the main signal.

See available indicators on Deriv

Indicator signals to open a deal

In options trading, there is the possibility of buying a Call option (price increase within a specified period) and a Put option (price decrease within a specified period).

An “up” signal, or buying a Call option, appears when a number of conditions are met:

• The red moving average crossed the green moving average from bottom to top;
• The relative strength index is above the level of 50;
• The fast Stochastic line crossed the slow (dotted) line from bottom to top.

Before buying a Call option, be sure to take into account the market situation.

With low volatility, the expiration time should be increased.

A “down” signal, or the purchase of a Put option, is also formed when certain factors are present:

• The red moving average crossed the green from top to bottom;
• RSI is below the 50 level;
• The fast line of the stochastic oscillator crosses the slow one from top to bottom.

When entering a trade, it is important to take into account the volatility of the traded asset.

When using the above indicator signals, it should be remembered that such an options trading strategy as scalping is not suitable for everyone.

Buying a Put or Call option, with insufficient analysis of the market situation, and showing intemperance instead of composure, the trader turns reasonable trading into a game of chance.

The chances of making a profit in this case are much reduced.

Start trading Options on Deriv

Scalping without indicators

When implementing scalping strategies for options trading, you can do without the use of indicators.

In this case, transactions with a trend are applied. Three factors are required for successful trading by this method:

• A very “mobile” currency pair, in which the trend increases or decreases sharply;
• A clear mechanism that determines this trend;
• Exact entry timing into the market.

To achieve high entry accuracy, you should make short-term trades with a trend with a minimum expiration time.

Moreover, you need to start on the rollback of the asset price.

The figure shows an uptrend on a minute time interval.

Its movement is displayed by arrows that show in which direction trading operations should be performed.

To accurately determine this direction, you should use the levels of support and resistance.

The symbols in the form of circles above the arrows represent the resistances.

Similar circles under the arrows are support.

Each subsequent maximum support is higher than the previous one. The same happens with resistance extremes.

Having determined in which direction the market is moving, you should choose the moment of buying a option with an expiration time of 5 minutes.

In this case, you need to start buying Call exactly at the moment when the trend, having completed the next correction, changes direction towards the main movement.

In the case of a downtrend, they act in a similar way.

It is important to remember that you should not choose an expiration time below 5 minutes, because sometimes the price can stay at the same level for 1 or 2 minutes without moving a single point up or down.

In addition, any trader should understand that losing trades cannot be completely avoided.

With the correct use of a scalping strategy for options, the number of profitable trades is likely to significantly dominate the number of unprofitable ones.