Traders’ decisions can often be influenced by observing the positions that other traders have taken for particular products. Traders can do this with the ETX Binary platform, which provides clients with the ability to use a ‘trader sentiment’ tool for each product. The tool displays the percentage of traders that have opened positions on each side of the option.
However, although this technique can be useful, there is no certainty that the positions that the majority of traders take will mirror the real-life movement of an option.
In addition, it is uncommon for the vast majority of traders to all trade in the same direction for a given option. Typically, sentiment is approximately 50:50, rendering it difficult to gather a great deal of information from the way that sentiment is leaning.