When it comes to choosing an asset to trade binary (digital) options traders often look to Commodities, and in particular Oil, Gold and Silver. Most broker platforms offer these three commodities at the minimum. Oil commodity is heavily supply and demand focused. There is always much speculation as to the future price of a barrel of oil, and oil futures were around long before binary trading emerged as a major retail investment tool back in 2008.
Oil commodity
Commodities are often where traders turn when there is uncertainty in the equities markets. Oil is a favored commodity to trade as the world economy is heavily reliant on it at both consumer and industrial levels. The price is driven by supply, demand and reserve levels. All three factors fluctuate, causing correlated fluctuations in price.
Major economic and political events play a crucial role in oil binary options.
For example, the US Fiscal Debt Talks of December 2012 caused great volatility in the price of oil commodity. Failure of the talks could have caused recession. Recession leads to lower demand for oil. Therefore, the price dropped in anticipation.
As the talks reached a “temporarily” successful conclusion automatic austerity measures were averted and oil rebounded. Oil then corrected as it had rebounded over enthusiastically.
This example highlights an interesting oil trade scenario and some of the research and analysis that those specializing in the commodity must complete.