In a recent article published by the financial authority Bloomberg’s, it was declared that “it’s okay to love banks again.” As a short term trader, even though this sentiment might not accurately reflect reality, it is important to know that public opinion, and even many of the worrisome fundamental indicators, are shifting when it comes to big banks. How you act on this information will be dependent on the types of trades you typically focus on. A binary options focus with this can create a lot of opportunity, though. This is especially true if your broker of choice has a wide array of stocks for you to choose from. You may also want to look at brokers that offer ETFs, as these are starting to emerge.
As anyone who has studied the markets for any length of time knows, the market crash that came to a head in 2008 occurred mainly because of banks. And over the last nine years, banks and other financial institutions have had their fair share of problems, causing many investors to steer clear of them. Not only has this cause instability over entire indices, but many banks have really struggled to get back to where they should be. Some, like Wells Fargo, have even resorted to less than honorable tactics to get there. It has caused a lot of distrust, and has caused many to not even consider investing in the financial sector.
If that is to change, then traders could be in for a quick boost. If the financial sector really is safe for steady long term growth, then we should expect banks stocks to quickly rise in price. For binary options traders and others that focus on quick day trades, this prospect holds a lot of potential. One article alone does not make this true, but the article is the result of fundamental differences in the banking industry, the gradual shifting of public perception, and the fact that stock prices have bounced upward thanks to the new political era that the United States is entering. It has done a lot to boost the financial sector, and banks are currently moving fast as a result of the combination of all of these factors.
One concern that many had about the sudden improvement in bank stock prices was that much of it was based upon conjecture after Donald Trump was elected President of the U.S. The thought line was that Trump would be good for banks, and prices were boosted as a result of this. Psychological movement is great for binary options traders if they are able to anticipate it and back away from it when it is no longer appropriate to keep at it. And many traders and investors had backed away from bank stocks because the psychological boost did appear to be over. However, the boost that was created is starting to look like it was completely justified. What started out as psychological movement is now being confirmed by the results that some banks are showing.
What’s more, the early days of the Trump Presidency are likely to push the financial sector up even more. Other sectors may also benefit, but because this particular sector has already been singled out by analysts, it is the most obvious candidate for large gains. The fact that gains have already been made, stability has been established, and it looks like it could be just the beginning is a good sign. However, how you trade these stocks or other assets is going to be dependent on your account size and your goals. Binary options trading is a great way to approach these if you don’t have the necessary capital to use a margin account.