View source for Asian handicap binary options

```
{{DISPLAYTITLE}Asian Handicap Binary Options}

==Introduction to Asian Handicap in Binary Options==

Asian handicap binary options represent a fascinating and potentially profitable strategy within the world of [[Binary Options Trading]]. Unlike standard binary options which focus on a simple 'above/below' prediction at expiry, Asian handicap introduces the concept of adjusting the strike price based on the average price of the underlying asset over a specific period. This article will delve into the intricacies of Asian handicap binary options, explaining the core principles, variations, advantages, disadvantages, and practical application for beginners. We’ll cover how it differs from traditional binary options, the calculations involved, and risk management techniques specific to this strategy.

==Understanding Asian Handicap – The Foundation==

The term "Asian Handicap" originates from football (soccer) betting. In football, an Asian handicap is designed to eliminate the draw outcome, providing two possible results. This concept is adapted to binary options to create a more nuanced trading opportunity.  Essentially, an Asian handicap binary option modifies the strike price of the option based on the average price of the underlying asset during a pre-defined portion of the trading period. This adjustment aims to level the playing field, offering potentially higher payouts than traditional options, but also carrying a different risk profile.

Think of it like this: instead of predicting if the price will be *above* a static strike price at expiry, you are predicting if the price will be *above* a strike price adjusted by the average price over a specified timeframe. This average price calculation is the core of the Asian handicap.

==Types of Asian Handicap Binary Options==

There are primarily two types of Asian Handicap binary options:

*'''Asian Handicap Up'''*:  The strike price is adjusted *downwards* by the average price over a specified period. This means the underlying asset has to reach a lower level to be 'in the money' at expiry.  It's effectively betting that the price will perform *relatively* well, even if it doesn't reach a high absolute value.
*'''Asian Handicap Down'''*: The strike price is adjusted *upwards* by the average price over a specified period. This means the underlying asset has to reach a higher level to be 'in the money' at expiry. It's betting that the price will perform *relatively* poorly.

{| class="wikitable"
|+ Asian Handicap Binary Option Types
|-
| Type || Strike Price Adjustment || Trading Sentiment ||
| Asian Handicap Up || Adjusted Downwards || Bullish (Expect Price Increase) ||
| Asian Handicap Down || Adjusted Upwards || Bearish (Expect Price Decrease) ||
|}

==How the Asian Handicap is Calculated==

The calculation of the Asian Handicap is crucial to understanding the strategy. Here's a breakdown:

1. **Define the Averaging Period:**  This is the timeframe over which the average price will be calculated. Common periods include 15 minutes, 30 minutes, 1 hour, or even the entire duration of the option. The broker will clearly define this period.
2. **Calculate the Average Price:** The average price is typically a simple moving average (SMA) or an exponential moving average (EMA) calculated over the defined period.  Understanding [[Technical Analysis]] and different moving average types is beneficial here.
3. **Adjust the Strike Price:**
   * For Asian Handicap Up: Strike Price = Original Strike Price - Average Price
   * For Asian Handicap Down: Strike Price = Original Strike Price + Average Price
4. **Expiry and Settlement:** At expiry, the current price of the underlying asset is compared to the *adjusted* strike price.  If the current price is above the adjusted strike price (for Up), the option is 'in the money' and pays out. If it's below (for Down), the option is 'out of the money' and the investment is lost.

'''Example:'''

Let’s say you are trading a 60-second binary option on EUR/USD.

*   Original Strike Price: 1.1000
*   Averaging Period: First 30 seconds of the trade
*   Average Price (calculated over the first 30 seconds): 1.0980
*   Option Type: Asian Handicap Up

Adjusted Strike Price = 1.1000 - 1.0980 = 1.0980

For the option to pay out, the EUR/USD price must be *above* 1.0980 at the 60-second expiry.

==Advantages of Asian Handicap Binary Options==

*   **Potentially Higher Payouts:** Due to the increased complexity and risk, brokers often offer higher payouts on Asian Handicap options compared to standard binary options.
*   **Reduced Impact of Short-Term Volatility:** The averaging period smooths out short-term price fluctuations, making the option less susceptible to whipsaws. This can be particularly useful in volatile markets.  Learning about [[Volatility Analysis]] is crucial.
*   **More Nuanced Trading:** Asian Handicap allows traders to capitalize on trends and momentum, even if the price doesn't make significant absolute moves.  It focuses on *relative* performance.
*   **Elimination of Draw Outcomes (Similar to Football Handicap):** While not a literal elimination of a "draw," the adjustment of the strike price reduces the likelihood of the price ending exactly at the original strike, providing a clearer outcome.

==Disadvantages of Asian Handicap Binary Options==

*   **Increased Complexity:**  Understanding the calculations and how the averaging period affects the strike price is more complex than standard binary options.
*   **Difficulty in Prediction:**  Predicting the average price over a specific period can be challenging, especially in volatile markets.
*   **Higher Risk:** The adjusted strike price can make it more difficult to predict the outcome, potentially leading to a higher rate of losing trades if not managed properly.  [[Risk Management]] is paramount.
*   **Broker Dependency:** The calculation method and averaging period are determined by the broker, so it's crucial to understand the specifics of each platform.
* **Potential for Slippage:** Although less common, slight differences in price feeds can affect the average price calculation, potentially leading to unexpected outcomes.

==Strategies for Trading Asian Handicap Binary Options==

*   **Trend Following:**  Identify strong trends using [[Trend Analysis]] tools and utilize Asian Handicap Up options during uptrends and Asian Handicap Down options during downtrends.
*   **Breakout Trading:** Look for breakout patterns and use Asian Handicap to confirm the breakout. For example, if the price breaks above a resistance level, use an Asian Handicap Up option.
*   **Momentum Trading:**  Use momentum indicators like the [[Relative Strength Index (RSI)]] or Moving Average Convergence Divergence (MACD) to identify strong momentum and trade in the direction of the momentum using Asian Handicap options.
*   **Range Trading:** Identify trading ranges and use Asian Handicap Down options when the price approaches the upper boundary of the range and Asian Handicap Up options when the price approaches the lower boundary.
*   **News Trading:**  Be cautious with news trading. While major news events can create strong trends, they also introduce significant volatility. If trading news, use a shorter averaging period and manage risk carefully.

==Risk Management for Asian Handicap Options==

*   **Position Sizing:** Never risk more than 1-2% of your trading capital on a single trade.
*   **Stop-Loss Orders (Indirectly):** While you can't directly set a stop-loss on a binary option, you can manage risk by limiting the number of consecutive losing trades you allow.  If you experience a series of losses, stop trading and reassess your strategy.
*   **Diversification:**  Don't put all your eggs in one basket. Diversify your trades across different assets and option types.
*   **Understanding the Broker's Terms:**  Carefully read and understand the broker's terms and conditions, including the averaging period and payout structure.
*   **Demo Account Practice:**  Before trading with real money, practice with a [[Demo Account]] to familiarize yourself with the strategy and the broker's platform.
* **Volume Analysis:** Use [[Volume Analysis]] to confirm the strength of trends and breakouts. High volume during a breakout suggests greater conviction.

==Choosing a Broker for Asian Handicap Options==

Not all brokers offer Asian Handicap binary options. When selecting a broker, consider the following:

*   **Availability of Asian Handicap Options:** Ensure the broker offers this option type.
*   **Payout Rates:** Compare payout rates across different brokers.
*   **Regulation:** Choose a broker that is regulated by a reputable financial authority.
*   **Platform Usability:** Select a platform that is user-friendly and provides clear information about the Asian Handicap calculations.
*   **Customer Support:**  Ensure the broker offers responsive and helpful customer support.

==Advanced Considerations==

* **Correlation:** Consider the correlation between assets. Trading correlated assets with Asian Handicap can amplify potential gains or losses.
* **Time of Day:** Different assets exhibit different behavior at different times of the day.  Adjust your strategy accordingly.
* **Economic Calendar:** Be aware of upcoming economic releases that could impact the underlying asset.

==Conclusion==

Asian handicap binary options offer a more sophisticated and potentially rewarding trading experience compared to standard binary options. However, they require a deeper understanding of the underlying principles, calculations, and risk management techniques. By carefully studying this article, practicing with a demo account, and implementing sound risk management strategies, beginners can successfully incorporate Asian handicap options into their binary options trading arsenal. Remember that consistent learning and adaptation are key to success in the dynamic world of financial trading.  Further exploration of [[Binary Options Expiry Times]] and [[Binary Option Payouts]] will also enhance your understanding.



[[Category:Binary Options Strategies]]
```


== Recommended Platforms for Binary Options Trading ==
{| class="wikitable"
! Platform
! Features
! Register
|-
| [[Binomo]]
| High profitability, demo account
| [https://binomo-r3.com/promo/l28?a=96e026fdbc35&t=0 Join now]
|-
| [[Pocket Option]]
| Social trading, bonuses, demo account
| [http://redir.forex.pm/pocketo Open account]
|-
| [[IQ Option]]
| Social trading, bonuses, demo account
| [https://affiliate.iqbroker.com/redir/?aff=1085&instrument=options_WIKI  Open account]
|}
== Start Trading Now ==
[https://affiliate.iqbroker.com/redir/?aff=1085&instrument=options_WIKI Register at IQ Option] (Minimum deposit $10)

[http://redir.forex.pm/pocketo Open an account at Pocket Option] (Minimum deposit $5)

=== Join Our Community ===

Subscribe to our Telegram channel [https://t.me/strategybin @strategybin] to receive:
[https://buy.paybis.com/click?pid=26030&offer_id=1 Sign up at the most profitable crypto exchange]

⚠️ *Disclaimer: This analysis is provided for informational purposes only and does not constitute financial advice. It is recommended to conduct your own research before making investment decisions.* ⚠️