General Motors is one of the world’s most popular companies when it comes to auto production, and their reach is global. This in itself doesn’t mean much, but when they make a major announcement in a major developing market such as China, the effect can be very good and it can happen quickly for their stock prices. Dan Ammann, the president of GM, announced at a Beijing car show that they will be increasing Chinese production up to five million soon, and that in the year 2015, they expect sales of Cadillacs to double in size. These are lofty goals for sure, especially because of the struggles that the auto industry has faced, but there is actually not a lot of wishful thinking here–these thoughts are very realistic.
The automobile industry has struggled in the United States, but China is a huge and relatively untapped resource. And with the $12 billion that GM and its Chinese partners are investing in their brand, it’s very likely that China could become the next hotspot for selling cars.
In 2013, GM saw sales rise by over 11 percent, and 2014 is also looking promising. Latching onto this growth early would have been a great move for long term investors, but short term traders can still join in on the action. Even over the last week, GM’s stock has gone up about $2, and a big boost is likely for the week of April 21st, too. Short term trades, like five minute binary options, can have very good results with an event like this. Binary options have received scrutiny lately because they return less than what you lose on an incorrect prediction, but a string of a few correct guesses in the asset’s movement will give you a big return. This is especially true when it becomes slightly easier to predict motion.
If you had invested in 100 shares of GM a week ago, you would have needed to spend about $3,200 in order to buy those shares, plus any brokerage fees that your online stock broker charges you. At this point, you would have had a profit of less than $200 after those fees were accounted for. That’s if you had gone down the traditional stock trading route.
With binary options, you will make about 80 percent on a five minute option when you are correct, and lose 100 percent when you are wrong. You need to be right far more often than you are wrong with these, and because there is little liquidity, you can’t easily cut your losses in the midst of a trade. But if you time the market right, then you can give yourself an advantage, such as with GM’s recent news. When you increase your likelihood of a correct guess, the odds of making money go up. Even if the stock doesn’t go up in a huge way, you only need to be right by the tiniest of margins in order to get the full profit credited to your account. It doesn’t matter if you’re right by a penny or a million dollars, if you are correct in predicting the movement’s direction, you will get the previously agreed upon rate in profits.
If you were risking $100 per trade, and you were right four out of five times, you would have risked $500 and lost $100. You also would have gained $320 for a total of $220 in profits after your loss is accounted for. Your risk would have been just $500 overall–less than 1/6th of what you would have needed to risk in the stock market–and you would have made more money. What’s even better is that it wouldn’t have taken a week to get to that point. Something like this could have been easily accomplished in less than an hour.