What Are Binary Options ?
Binary options are a relatively new type of investment that allows the trader to bet if an asset will either display a certain type of price behavior or not. Earnings are paid if asset behavior was predictedy correctl .
The term means ‘ two options ‘ and this means that there are two options at the dealer . They are also called digital options, and because the profit is fixed from the outset and can not be changed , they are also called fixed – yield or ” forex options ‘ . They are also known as all- or-nothing options because it is so yield functions : either it becomes full profit or wins you nothing at all.
The price is shown as an index between 0 and 100. If you wager on hands down the bet 100 , and if it does not happen it is determined as 0.
The Digital broker gives a price of an option and if the investor believes it will happen buys the option , otherwise they sell the option. Best way to explain this type of financial commitment is to give an example of the simplest kind – an up – or – down bet.
Consider the following : the time is 15:30 and the FTSE is at 5400th Exchange closing at 5425 yesterday and your broker suggests ‘ FTSE up ‘ with a price of 24-26 .
You think the FTSE will rise as it nears closing time so you buy ‘ FTSE up ‘ binary option for £ 20 per point at the price of 26. This time, you were right because the FTSE closed at 5450 so you win £ 14 800 (100 – 26) = 74 x20 .
As long as the FTSE went up , the bet will end up on the 100 , otherwise it would have been 0 instead. So if the FTSE had gone down instead you had lost £ 520. This is calculated based on the price, 26 times the amount of your bet , ie £ 20.
Before you invest in binary options you know just how much you can lose, which in this case was £ 520.
There are different types of binary options but the principle is the same, then you a question is asked and the answer is either yes or no.
A ‘one touch’ option is o dull market will ‘ touch ‘ at a certain price before the option expires . If this happens , the result is 100 , otherwise 0.
Ladder or ladder is called the type of binary option which focuses on whether the price will end up being over a certain level. For example, the ‘ Wall Street of level 12200 ‘ will result in 100 if the price climbs above this level , or 0 if not .
A binary target or target option is o matte reach a particular price range . For example, the ‘ Wall Street up 20-40 ‘ win if the price was between these two values at maturity , and lose if it were otherwise .
This type of binary option is whether today’s hi and lo will be a gap from yesterday .
This type of investment is about two values that are determined in advance. For example , this may be that the FTSE will move between +50 and -50 during the day. If these values are achieved , you lose , but if you are within the limits , you will win .
Reasons to trade binary options
Binary options are unique and show characteristics that distinguish them from other types of investments. Traders can buy assets in several different classes , and options have always an expiration date or an expiration . The investor knows exactly how much the venture will cost , and how much star to win or lose depending on the outcome .
There are many reasons to trade binary options. Binary options was licensed the same year as the traditional stock market collapsed in the United States. Some good reasons to shop with just binary options are:
a) Fewer risks
In traditional stock markets , there are many factors to consider . Debt , profit, recession, bad internet and unscrupulous broker can affect the stock market , making foreign exchange and asset trading is very risky .
Binary options have not all these factors. No changes , no setbacks , no debt and no profit margins to mind. There is also no call.
b ) More options
Some brokers offer up to 90 different assets to choose from when you trade binary options. 90 different ways to make money , at any time. If you want to find a so- called bull market is among binary options to look.
c ) Reduction of trade cost
If you live in the U.S. and deal in Forex , there are new rules that says that you must open an account with at least $ 25,000 to trade with currencies. With binary options , you can start with so little as $ 100. It costs thus not the shirt to trade binary options.
d) improved yield
You can generally make more money in binary options than on other types of stock markets . The yield varies between 70-90% on wagers , and up to 500% on speculative högavkastningssatsningar . Trade with extremely short-term options can give you even more money.
What is sold in the binary options market ?
Several different assets sold in the market for binary options and these asset classes are:
Currencies ( Forex )
Stock market index
Currencies are most popular to trade with. Their options expire within 24 hours. A wide range of currencies , inclusive the great players to choose from .
Stock market index that is commonly sold is :
Dow Jones ( U.S. )
S & P500 (USA)
Xetra DAX (Germany)
Zurich SMI (Switzerland)
TADWUL (Saudi Arabia)
Straits Times (Singapore)
SSE180 ( Shanghai, China )
Tel Aviv 25 (Israel)
The Nikkei 255 (Japan)
Hang Seng (Hong Kong)
There are more but these are the most common you will see on different platforms. Stock markets are generally only open show hours each day.
Raw materials are not as well represented in the binary market. Gold, silver and crude oil, however, almost always . Other commodities are bonuses. Commodities can just deal with while their stock market , the Chicago Board of Trade ( CBOT ) , is open.
Shares should be number two on the list since it traded much with them. Who shares offered will vary from broker to broker, but generally sees technology stocks like Apple, Microsoft, Google and FaceBook .
Binary options brokers
Regarding broker is the absolute cream on the market binary banc de Swiss . Their interface is extremely easy to use and it’s easy to see just how your binary options is to , anytime translated from here
What Are Binary Options ?