Thursday, April 9, 2015

Profit From Social Trends With Binary Options

As a binary options trader, you know that the news moves the market and causes trends. However, have you ever thought about how you get your news? I recently came up on a poll from The Street that brought new information to light for me. Most people aren't getting their news from digital news websites; instead, news is becoming a much more social thing. The poll found that while digital news websites take about 19% of the pie, a whopping 72% of people went to one of three social networks for their digital news; Facebook, Twitter, and LinkedIn. Today, we'll talk about why this makes a difference, which of the social networks is currently the leader, and what it means for their stocks moving forward.

Why This Makes A Difference

Digital news is a big deal; such a big deal that companies like CNN, Forbes, Bloomberg, and more have spent millions of dollars on building the perfect websites to attract news seekers. The bottom line is that there's a ton of money in news! Think about it, Daily Finance sold to AOL for $351 million! So, if you look at it that way, the social network that serves up the majority of the digital news will most likely make quite a bit of money from ads associated with that news.

So, Who's In The Lead?

  1. Twitter – Of all of the users that answered the poll, 34% said that they got their news from Twitter. This makes a lot of sense because if you think about it, that's what Twitter was designed for. As a micro-blog social network, characters in posts are limited; so, Twitter is more like a stream of headlines. This also explains quite a bit when it comes to the company's earnings. While they are still struggling with new users, Twitter did generate far more than experts expected in revenue. Chances are, the spike in revenue had a lot to do with why people use the social network rather than how many new people are finding it!

  2. Facebook – In second place, you guessed it, Facebook. If you're surprised, don't worry, you're not alone. As the world's largest social network, I assumed that Facebook would be in the lead when it comes to serving up the news. However, it makes sense that people would be using Facebook more to connect with friends, colleagues and family than to read the news. Nonetheless, Facebook does serve up a pretty large portion of digital news. According to the poll, it's where about 31% of online news seekers are going.

  3. LinkedIn – Finally, we have LinkedIn. To be honest, I didn't even expect LinkedIn to be considered in the running for this. Nonetheless, the majority of LinkedIn users are professionals, and are a prime audience for news. With that said, according to the poll, LinkedIn serves up about 7% of digital news to respondents.

What This Means Moving Forward

For the most part, this means that these three social networks will most likely never meet MySpace's fate. The reality is that investors have been asking questions about the stability of social media in the market, leading to high volatility. However, social media has turned into something far more than a way to connect with friends and family, it's becoming ingrained in our day to day lives; even in our news consumption habits.

What This Means For Binary Options Traders

As a binary options trader, it's your job to look for trends to capitalize on. While investors question the validity of social media as a long term investment, it's causing quite a bit of volatility in the market. Just look at Twitter, Facebook, and LinkedIn over the past month and you'll see what I'm talking about. Binary options traders can make quite a bit of money off of these wild trends. So, keep an eye on the news, when you see a story about a social network that “may fail”, watch the chart and look for the bottom. Then place your trades on calls and bank as the stock rises following the trend; as with these three stocks, there will definitely be uptrends!

Monday, March 30, 2015

Is Apple Gearing Up For A Come Back?

Apple(NASDAQ: AAPL) has had a rough month in the market throughout the month of March. Between the botched Spring Forward event, the poor investor opinion of the watch, and economic pressure, it seemed as though Apple stock just didn't have a chance. However, the big question now is, will Apple bounce back this week as we move into April? I think they will. Here's why…

Apple TV Service Is On Its Way

If you could name one entertainment based service that you think the majority of Americans pay for, what would that be? Chances are, you're thinking about cable TV service. The average cost for cable TV service in the United States is over $64 and Apple aims to change that. The company plans to launch it's own set top box product that will give consumers access to streaming content from providers like HBO, CBS, and more. Apple said that the monthly service fee will range from $20 to $30 depending on the package and offer a low cost alternative to cable television.

Investors Know That Apple Is Strong Enough To Bounce Back

Apple is a huge company; the largest in the world by market capitalization. They didn't get so big by laying down their gloves every time the fight got a bit tough. The reality is that Apple has been knocked down before, and will be knocked down again. However, as soon as they take a hit, they make a hit in most cases. Look at the most recent decline for example. After just a few weeks of downtrends, Apple announces its plans for the new TV service; peaking investor interest once again. The bottom line is that no matter what stock we look at, we're going to see price fluctuation. Nonetheless, Apple is a company that is capable of changing momentum in the market quickly; and we should see the start of that next week.

Economic Blues Will Start To Subside

Last week, the market was hit by the realization that interest rates are going to increase and by the fact that durable goods orders dropped. However, the concerns over these issues seem to have subsided on Friday as the market started to adjust momentum, moving in a positive direction.

Although Apple didn't join the masses in the market with regard to moving to the green on Friday, I think that there's little resistance above the price at this point. The bottom line is that thanks to the poor market movement as a whole last week, Apple stocks are trading at a relatively low price; giving smart investors the opportunity to buy low in hopes of selling high. So, with reason for investors to buy and little resistance in the upward direction, I couldn't imagine the stock going anywhere, but up throughout the next week at least.

Final Thoughts

If you follow my writing, you know that I'm definitely an Apple bull over the long run. However, as a trader, that doesn't mean that you don't have the opportunity to earn off of short term price volatility. With that said, I hope you had a few in the money put options on the decline, and this week, it's time to start profiting on uptrends.

Sunday, March 29, 2015

Tech Stocks Are Starting To Recover

If you follow my writing, you know that I'm a bit of a tech stock junkie. Who can blame me? Not only do I get to watch and capitalize off of trends in the market, I get to follow amazing advancements in technology. That is a win, win my friends! That being said, we've seen big things in the tech market this week; and by things I mean drops. However, on Thursday, it seemed as though the market was on the mend. So, today we'll talk about the reason I think we saw the tech market (and most other US stocks) fall throughout the beginning of the week, what's happening in the market now, and what we can expect from tech giants like Apple, Facebook, and Twitter in the near future.

Why The Market Struggled

When you first take a look at the tech market and try and figure out the reason for the fall, it's easy to think “This doesn't make sense.” However, in this particular case, it's important to look outside of tech. The reality is that the Dow Jones Industrial Average, the S&P 500, and the NASDAQ have all had a tough week. The reason must be bigger than tech.

In this case, the reason is simple. The cause of the drop was economic changes. First off, the Federal Reserve announced last week that they would not be aggressive in increasing interest rates. While investors liked the fact that the Federal Reserve isn't going to be aggressive, they seemed to have left out a big piece of the news in the beginning; the fact that rates were going up. Higher rates mean less gains; and that seems to have set in earlier this week.

The second thing to look at is why the drop grew in momentum on Wednesday. Once again, the reason for this is simple. Wednesday morning, before the opening bell, new industrial data was released. The data showed that orders for durable goods were down for the third month out of the past four in February.

So, What Is Causing The Recovery?

Tech stocks seem to be back on the rise. Facebook, Twitter, and Apple are all trading at gains, and the upward momentum seems to be sustaining; and the reason is once again, simple. The reality is that investors aren't going to let the market crash without good reason. While the fact that the Federal Reserve is going to raise interest rates is a bit of a concern, and the fact that durable goods orders are falling, these just aren't big enough reasons to force a major correction (10% decline or greater) in the market. Throughout the week, all major indexes in the United States have fallen drastically; and they've finally hit the floor! Now, instead of seeing a reason to sell, investors are seeing an opportunity to get in on profits cheap while the market is at a low.

What We're Likely To See Next Week

Next week is most likely going to be a great week for the market. An important thing to remember is that the market moves in waves. When valuations are too high for one reason or another, corrections happen and the value of stocks fall. However, following large declines like we've seen, we generally see pretty impressive gains just around the corner. So, given the fact that it seems like we've reached the floor on this drop, it's time for stocks to bounce back; and if history is any indicator, it will be in a big way.