Day Trading Strategies

Investors these days need ultra short term day trading strategies that work. Wild market swings make long term trades entirely too risky for traders relying on consistent profits for income. While I have heard a few gimmicky methods that involve automated systems or extreme leverage I believe the better alternative for creating consistent short term income opportunities involves using options. Here are three systems should create opportunities for traders of any capital level.

Standard in the Money Options Trading Using Modest Leverage Ratios

This method is an old stand-by and should be familiar to most seasoned investors. The idea is to buy modestly in the money options (either puts or calls depending on your preference or forecast) and sell them for a profit prior to expiration. This strategy works well for a couple of reasons – increasing volatility lifts all option prices (all else equal) and increased volatility is the trader’s friend. In cases of low volatility premiums tend to be low so entry costs are low and hence leverage can be relatively high. The point is the math works reasonably well in both high and low volatility environments. High volatility brings wide price swings while lower volatility offers better entry cost and higher leverage and wider safety margin. Our options trading tutorial on leverage covers this point in greater detail.

Binary Options Trading – Profitability with Low Capital and Ultra Short Duration Investments

Another of my favorite day trading strategies involves trading binary options. For those not familiar with these securities they are ultra-short term investments that pay extremely high yields. Yields typically are on the order of 60% and trade durations run as little as an hour – although I typically prefer the end of day expiration contracts. See our full binary options trading tutorial for more in depth discussion of the various basic day trading strategies for binary options.

Weekly One-Touch or Barrier Options Trading for Ultra High Short Term Yields

The last of the day trading strategies I wish to cover is that of weekly one-touch options. These are a variant of the exotic options / binary options genre. Here the system offers 200 to 400% yields on weekly expiring one-touch options contracts. If the underlying asset closes trading during any day of the week above (or below depending on your position) the strike price, the contract is immediately considered in the money and pays out full yield. Of course the trick with making use of weekly one touch options is finding the contract with the right strike price likely to hit during the duration of the contract. For this system it really pays to shell out some money for premium binary options signals to help find the best opportunities and capitalize on them. Signals trading is a bit sporadic given that circumstances have to line up for a signal to be triggered, but if you get a trigger and it matches with the available weekly one-touch options there is a opportunity for a big pay day.