What are Binary Options Trading?
Basics on Binary Options • Binary Options are financial exotic options. • Traders will predict the price according to the market condition. • If you guess correctly, you win a payout. If you are a wrong, you gain nothing. • The expiry period for binary options is very diverse as short as 30 seconds or last up to a year.
Buy a call option When you predict the price of the asset will increase
Buy a put option When you predict the price of the asset will decrease
Types of Binary Options
Types of Binary Options - Definition High/Low
In/Out
Touch/ No Touch
Ladder
Trader buy a call or put option if he thinks the price of the asset will increase or decrease from the current market value.
Traders have to predict whether the price of the asset they have chosen will stay within a given price boundary or stay out of it.
In Touch, the market price of the underlying asset much reach the strike price at-least once before the expiry and in the case of No Touch it is the opposite.
In Ladder, there are multiple price limits and requires different price movement from the current market price.
Common terms in Binary Options trading • • • •
Binary Call Option Put Option Strike Price
• • • •
Expiry Date In the Money Out the Money At the Money
To know detailed on Common Terms of Binary Options
Binary options Underlying Assets
crypto
Commodities
Indices
forex
Stocks
Example of Underlying Assets Forex AUD/USD
Stock Apple Google Barclays PLC
Indices
USD/JPY EUR/USD
Crypto Ripple
Ethereum Bitcoin
Commodities
DAX 30
Crude Oil
FTSE 100
Gold
S&P 500
Silver
How to Trade Binary Options
Choose an expiration date
Choose a broker
Choose market and asset
To know detailed information
Place your trade
Allocate the amount
Binary Options Explained with Example We are using high low/ call put method of binary trading for Forex Traders
A Forex Trader
Binary Options Explained with Example We are choosing EUR/USD as a trading pair where broker offers 90% payout
Binary Options Explained with Example We have chosen 10 minutes as an expiration time
Binary Options Explained with Example Predict the market price of EUR/USD pair
If the price will close above, you buy a call option
If the market price will close below, you buy a put option
Binary Options Explained with Example A lot of analysis involved to win a trade Follow the market news Win the trade with High Payout
Guess the asset price accurately
Use trading tools and indicators
Binary Options Explained with Example Suppose the EUR/USD pair price is 1.14 After the market analysis, you decide to buy a call option If your prediction goes right you will earn a 90% return or get nothing in return
Deposit $10
Binary Options Explained with Example Let’s examine the two scenarios
If your prediction is correct (EUR/USD price rises above 1.14 after expiry), you get 10 + (90% of 10) which is equal to $19.
If your prediction is wrong (EUR/USD price drops below 1.14 after expiry), you get nothing in return i.e. $0.
Advantages of Trading Binary Options High Payout Percentage
Simple Nature of Trading Flexibility in Trading Instruments
Flexibility in Time Low Initial Deposit Fast-paced Trading
Disadvantages of Trading Binary Options
Many traders consider trading binary options as gambling
Losses are substantial
Not permitted in certain locations
Lack of risk management
At the end‌
Start with a small investment and invest in those markets that you are comfortable with. Find a few strategies which will help you to trade a profitable Binary Options. Greater the price movement, higher the payout.
Take trading losses as a lesson instead of a setback
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