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Trading Exxon Binary Options

Exxon Mobil (XOM) is one of the world’s largest companies, specializing in oil production and transportation. For a very long time it has been considered to be a safe investment; almost everyone in the world uses oil in some way, mostly for driving around their vehicles. It’s long been considered a “blue chip” stock simply because of its nature for slow and steady earnings. Blue chips are established companies that have a very reliable nature, and Exxon fits this description beautifully. If you are looking to buy and hold, this is a great stock to own. Five years ago, this stock was around $75 per share. Not too long ago, it was around $100 and it currently resides at around $91. There’s been lots of growth, and as long as oil is the world’s most popularly traded commodity, there will be lots more.
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But for binary options traders, this stock can be a nightmare. Growth here can be slow, and even losses can come gradually, and this is usually the exact opposite of what binary traders are looking for. That doesn’t mean this stock should be avoided, though. Actually there are some really good opportunities that come from Exxon, especially when you use it in concurrence with trading crude oil options. A good strategy would acknowledge the level of connection between the price of oil futures and the movement of Exxon’s stock prices. The statistical term for this is called correlation, and the higher a correlation is, the more likely two different sets of numbers (think prices) are to move in lockstep with each other. Crude oil futures and Exxon’s price have a high correlation–but it’s not as high as you might expect since the services provided are slightly different. XOM has other things to do than just sell oil, so the relationship will not be perfect, but they do have very similar prices.

The fact is, XOM hasn’t moved a ton in relation to other assets. You can compare this to a list of ETFs in the same sector to get a feel for it if you’d like. You will find that over certain periods, ETFs usually will tend to go up more, but that when there are losses, the ETFs lose more money. During the height of the housing crisis (December 2007 to June 2009), for example, you will see that XOM lost 19 percent. Now compare that to the Energy Select Sector (XLE) over the same period; XLE lost 32 percent, even though it takes a more “diversified” approach to incorporating energy stocks. Exxon is simply a more stable asset than a lot of its competition and can withstand a poor economy in a better fashion. The obvious downside to all of this is that ETFs are not available as binary options, but the plus side is that you can still take advantage of Exxon’s positive nature if you want to take a long term approach with your binaries. This can be tough for some short term traders since long term trades tie your money up for a while and this inhibits the money making process in a fashion. But the benefit is that looking at year long call options with this stock can be an easy way to boost your profits a bit at the end of the year more often than not.

Your best approach is to simply do your normal day to day trading, and take a few long term options that you think have a very strong chance of being profitable. XOM is a definite candidate for those long term options, especially if you are interested in call options. Doing so will add a bit of true diversity to your binary trading and create an extra layer of safety.
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