Although the application of Bungee Strategy may differ among traders, the basic concept and the operation is the same all over the world. Under this strategy it is believed that since in binary option trading there can be only two probable outcomes, the turnover is fast.
The appeal of handsome profits in quick time draws investors towards this strategy. Sometimes the fast trades provide returns as high as 60% to 75% percent. At times the returns are so high it is not easy to calculate the composite value of the profits.
Investors use the nothing or all bungee options trading contracts in order to reduce the possibility of a loss. It can be done by combining the “at the money” put with an “in the money” call. This position is advantageous for the investor because in case the spot price or the value is between the two values or strike prices, the investor still earns money.
So a bungee options strategy combines a call option with a put option into a double position. The main advantages of trading with this strategy are the ease of trading and simple payment structure. Traders can start with low investments and then receive high returns.
Because of this, it is simple to make high returns in quick turnover time with the above mentioned. But no strategy is totally safe or can be called perfect. What works for a trader might not be good for others. For this reasons it is the experience and trading style of an investor which works for him and the actual strategy that he develops by himself brings him the expected profits.