BINARY OPTIONS TRADING GUIDE

BINARY OPTIONS TRADING GUIDE www.regaloptions.com

Contents

CONTENTS CONTENTS 2 FORWARD 3 INTRODUCTION TO BINARY OPTIONS

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BENEFITS OF TRADING BINARY OPTIONS

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BINARY OPTIONS BASICS

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TYPES OF BINARY OPTIONS

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TURBO

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ANALYZING BINARY OPTIONS

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BASIC STRATEGIES

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MONEY MANAGEMENT

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TRADING HOURS

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ABOUT US

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GLOSSARY

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Forward

FORWARD Dear Investor, Welcome to Binary Options Trading Guide! You are about to discover the exciting world of trading as presented by one of the leading online brokers in the industry.

Binary Options are currently the fastest-growing investment sector in the global markets. Learning to trade in Binary Options with Regal Options is fast and easy. After just a few minutes you will be able to effectively apply the basic strategies. With just a little more effort, you can learn some of the more advanced strategies and realize even greater returns on your investments.

Binary Options Trading Guide will focus on getting you ready to start investing in Binary Options. You will learn the basic mechanics and strategies of this type of investment.

With a firm understanding of the various tools Binary Options offer and some proven analytical methods and logistics, you will be ready to start investing and see positive, profitable results.

Regal Options is committed to providing you with a trading platform that is both powerful and easy to use. Our technical staff has made all efforts to ensure it is the most secure and user-friendly trading platform on the Internet. When you use it, you will see just how easy it is to become a successful Binary Options investor.

At Regal Options you can enjoy the flexibility of choosing from different types of Binary Option instruments for your investments: yy Digital yy Touch yy Range yy Turbo.

We hope that you will find reading Binary Options Trading Guide an enlightening and enjoyable experience and can’t wait to see you in the Regal Options trading rooms.

Happy Investing!

Click here to start trading with Regal Options.

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INTRODUCTION TO BINARY OPTIONS

INTRODUCTION TO BINARY OPTIONS Binary Options are a popular investment tool with both amateurs and professional traders around the globe. Binary Options are similar to “Exotic Options� which are traded on private markets and require the services of a broker, meaning that most people never have the opportunity to trade them.

Binary Options are traded over the counter on the Internet. This means that anybody can invest because there is no middle person to go through. Each investor is in complete control of their Binary Options portfolio. There are several unique features of Binary Options that make them such a fast-growing and extremely popular investment: yy Short-term option trading, yy High returns, yy Trading is open 24 hours a day, 7 days a week.

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BENEFITS OF TRADING BINARY OPTIONS

BENEFITS OF TRADING BINARY OPTIONS When compared to traditional investment and options trading methods, it is clear that Binary Options have several advantages. The benefits cover different aspects of the investing experience from ease of use to potential profitability. Regal Options recognizes that Binary Options are not the only way to invest and that some people will not find a place for Binary Options in their portfolio, but the majority of investors enjoy the flexibility, high returns and personal control that this type of trading provides.

High Return In general, a successful Binary Options investment can produce a profit between 75% and 81% of the initial investment. With traditional stock or option investments, the return may be less than 1% and require the investor to wait for their position to mature.

It can be months or even years before they see any profit with traditional investment instruments.

Short-Term Investment Option Binary Options involve a much shorter investment time than traditional stock or option positions. Most of them expire in a few hours. Some Binary Options may last for weeks while others may be less than an hour. Compared to the months and years involved in traditional investment positions, Binary Options are extremely fast investments.

A successful Binary Option investment can yield returns between 175% and 181% in around an hour’s time. This means that the investor’s capital is ready to be reinvested very quickly. An investor has the opportunity to ride a market trend hour after hour doubling and tripling their initial investment. When the market trend is ready to change course, the short investment time means the investor can change their strategy just as quickly.

Low-Stake Investments

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BENEFITS OF TRADING BINARY OPTIONS

Unlike traditional stock or option methods where a single investment can require several hundred or even thousands of dollars, an investor can risk as little as $10 on a single Binary Options investment.

Calculated Risk and Reward Probably the biggest advantage Binary Options trading has over other investment strategies is the fact that the risk and rewards of every investment are known beforehand.

The return on a successful investment is fixed and the Regal Options trading platform will calculate and display the return as you enter your investment amount. No other stock or option investment vehicle provides this level of transparency about the risk and rewards of a single investment.

Advantage in Volatile Markets Binary Options trading is the perfect way to take advantage of volatile market trends.

The short term and fixed rates offered by Binary Options makes it easy to capitalize on market swings while controlling the risks with smaller investment amounts.

One Pip Only While the traditional stock or option investment instruments require a minimum of three pips to determine if an investment is profitable or not, Binary Options can determine profitability from a single pip. Instead of calculating a delta between the underlying asset’s price at expiration and the initial investment time, Binary Option position determines profitability based on the underlying asset’s price at expiration only. There are no complicated mathematical formulas required to understand trading in Binary Options.

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BINARY OPTIONS BASICS

BINARY OPTIONS BASICS Understanding the Trade Parameters Binary Options trading is an easy way to invest because the parameters of every trade are derived from three simple factors:

The Asset Every Binary Option trade is based on an underlying asset. The underlying asset can be: yy A specific stock yy A market index yy A specific commodity yy A currency pair Because Binary Options enable investors to trade in so many diverse financial markets, many choose to specialize in a handful of assets or a specific market.

The Contract / Time of Expiration Every Binary Option position has a fixed time of expiration. Most online brokers will offer contracts ranging from one week to one hour. In addition to these time frames, Regal Options also allows the investors to purchase contracts which expire within just a few minutes. Most Binary Options on the Regal Options platform can be purchased up to 5 minutes before the established expiration time.

The Forecast or Prediction Accurately predicting the direction an underlying asset’s price will move is the key to successful Binary Options investing. By accurately forecasting an increase or decrease in the asset’s price, you can realize a profit between 75% and 81% on a single investment. The ability to almost double your investment on every single trade is a big reason why so many people are making Binary Options an integral part of their investment portfolio.

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TYPES OF BINARY OPTIONS

TYPES OF BINARY OPTIONS The Regal Options trading platform supports three types of trading tools. Each type has its own unique advantages and together they provide traders with a great deal of flexibility in their investment strategies.

Digital By far, the most popular tool for trading Binary Options is the Digital Option. Here the investor simply needs to accurately predict whether the underlying asset price at expiration will be higher or lower than the strike price for the Binary Option. A Call position will expire “In the Money” when the asset price is higher than the strike price whereas a Put position will expire “In the Money” when the asset price is lower than the strike price.

Before investing in the Digital contract, the Regal Options platform will calculate and display the return for a correct prediction as you enter your investment amount. You know how much profit you can expect before you invest. With Regal Options, the returns on a correct Digital investment will generally range from 75% to 81%.

Trading Example Let’s use Gold as an example asset for a Digital Binary Option investment.

After conducting some analysis and looking at a historical graph for gold prices you determine that Gold is currently trading at a low price. You also feel that this price is not indicating a downward trend but simply a blip in the market. You therefore decide to invest in a one hour Call Binary Option because you predict the price of Gold will now increase. If you had predicted that the Gold price would continue to drop, you would have invested in a Put Binary Option.

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TYPES OF BINARY OPTIONS

To keep things simple, let’s invest $100 in a Call Binary Option for Gold. As you are entering the investment amount, the platform is calculating the return at 76%. This means that at the end of an hour, if the price of Gold is higher than the strike price for the option, you will receive $176. That is your $100 initial investment plus a 76% profit.

Touch Another popular way of trading Binary Options is the Touch method. With the Touch method, an investor must accurately predict that the price of an underlying asset will reach a predetermined target price on or before the time of expiration. There are two ways to trade with the Touch options: Touch Up and Touch Down. A Touch Up option predicts that the underlying asset price will reach a target price that is higher than the asset’s current trading price. A Touch Down option predicts that the underlying asset price will reach a target price that is lower than the asset’s current trading price.

The Regal Options trading platform will display the Touch Up and Touch Down target prices for a chosen underlying asset. As you enter the amount of your investment, the return will also be calculated and displayed.

Trading Example Let’s continue using Gold as an underlying asset for our Touch Binary Option investment example.

Once again, your analysis and research reveals that Gold is currently trading at a lower price than you would expect. Let’s say the current trading price is $1,400. The platform is offering a Touch Down option with a target price of $1,398 that expires in one hour. The Touch Up target price for the same one-hour contract is $1,402. Based on your research and experience tracking Gold, you believe Gold should be trading closer to $1,405 so you decide to invest in the Touch Up option.

Once again, you invest $100. As you are entering your investment amount, the platform is calculating the return at 75%. This means that if the price of Gold reaches $1,402 at any time in the next hour, you will receive $175. That is your $100 initial investment plus a 75% profit.

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TYPES OF BINARY OPTIONS

Range Regal Options also supports Range Binary Option investments. With Range investments, the underlying asset has a predetermined price range for a set period of time. The investor must correctly predict whether the asset’s price at expiration will be inside or outside the price range. An In Binary Option will expire “In the Money” if the asset price at expiration is between the two target prices defined for the Binary Option range. An Out Binary Option will expire “In the Money” if the asset price at expiration is above the higher target range price or below the lower target range price.

The trading platform will automatically calculate and display the return for a correct Range Binary Option investment as you enter your investment amount.

Trading Example Continuing with our Gold example, let’s say the Regal Options trading platform is offering a one-hour Range option with a target price range of $1,399 - $1,404. As you will recall, the price of Gold should be closer to $1,405 which is outside the price range offered by this Binary Option. Therefore, you decide to purchase an Out Range Binary Option. If you felt the price of Gold would not get higher than $1,404 in the next hour, but would still stay above $1,399, then you would purchase an In Range Binary Option.

For simplicity, you continue to invest only $100. As you are entering your investment amount, the Regal Options trading platform is calculating your profit on a successful Out Range option at 80%. This means that if the price of Gold is higher than $1,404 in an hour, you will receive $180. That is your $100 initial investment plus an 80% profit.

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TYPES OF BINARY OPTIONS

TURBO One more way to trade Binary Options is through the Turbo method. The Turbo Binary Option allows you to enjoy the short-term investments with time frames of 60, 120, 300 seconds. Using this feature is no different than using the classic Digital Option. To initiate a Turbo trade, you simply select the asset and specify your investment amount. From there, you choose an Above or Below position and confirm it by clicking the “Buy” button.

An Above position will expire “In the Money” when the asset price is higher than the strike price whereas a Below position will expire “In the Money” when the asset price is lower than the strike price.

The Regal Options platform will calculate and display the return for a correct prediction as you enter your investment amount. Again, you know how much profit you can expect before you invest.

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ANALYZING BINARY OPTIONS

ANALYZING BINARY OPTIONS The price of an asset is influenced by a wide variety of factors. Both amateurs and seasoned trading professionals are aware of this fact. The most successful traders are able to analyze these different factors and come up with informed and credible predictions about how an asset’s price will change in the short and long term. Armed with these predictions, they can select Binary Option positions and make investments that ultimately result in higher profits.

The market and asset analysis methods investors use to make their predictions can be categorized as Technical Analysis and Fundamental Analysis. Many investors tend to rely more heavily on one type than the other, but there are also quite a few successful investors who apply both types of analysis with positive results.

Technical Analysis Technical Analysis can be thought of as a “By the numbers” type of approach to Binary Options research. Statistics are at the heart of most technical analyses. Compiling and interpreting data on market prices for the underlying asset in order to discover patterns and trends helps to predict what an asset’s price will do in the future. Some of the specialized calculations and analyses we will discuss include means reversion, moving average convergence/divergence and tracking momentum.

Principals of Technical Analysis Technical Analysis focuses on quantifiable factors like price and trading volume. By understanding what an underlying asset has done in the past, an investor can more easily predict what it will do in the future.

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ANALYZING BINARY OPTIONS

Trend Following Trend following is a method of examining the historical data of an underlying asset with the expressed purpose of identifying the trends. At the most basic level, any sustained price movement in a single direction constitutes a trend. Employing a moving average analysis can help identify the emerging trends for a particular underlying asset.

Trading Example In searching for a trend in Gold, we could look at a 2-day moving average and a 5-day moving average. By comparing the two charts, we may be able to identify an area where the 2-day average has significantly crossed the 5-day average. Such an occurrence would be a strong indicator of a developing trend.

Fundamental Analysis If technical analysis is quantitative, Fundamental Analysis is qualitative. Fundamental analysts gather any and all information that might influence how an asset or market will perform. This information is not limited to numbers and statistics. Often press releases, political events and even news reports will provide important data for fundamental analysis. Taking all of this information and examining it helps the investor to predict the future movement of an asset or market.

For instance, an investor applying fundamental analysis to Gold might keep track of the political situations in countries where gold is produced. Tracking the performance of banks and other macroeconomic factors are also very important pieces of data. Quarterly performance reports for companies that produce gold jewelry or use a lot of gold in the manufacturing of their products can provide valuable information. While this wider view is certainly important, staying aware of companies directly involved in mining and refining gold is equally important to the final analysis.

Balancing this diverse information and giving each piece of data proper weight is very important for fundamental analysis. In the end, this is a very subjective way to evaluate underlying assets. Each trader will approach fundamental analysis differently and may consider completely different data points when arriving at a prediction about how an asset will perform in the future.

To help our investors stay in touch with as much data as possible for fundamental analysis, Regal Options supplies real-time announcements and news about economic and financial events.

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BASIC STRATEGIES

BASIC STRATEGIES Becoming a successful Binary Options trader begins with understanding how Binary Options trading works and grasping the basics of technical and fundamental analysis.

Putting all of this valuable knowledge to work for developing and implementing trading strategies is the next step.

There are quite a few different strategies that Binary Option traders employ to realize higher profits. The basic strategies we are going to discuss are applicable to Digital trading. Since this is the most popular way to trade in Binary Options, we feel this is the best place to start.

Bullish Strategy When you are bullish on an underlying asset, you believe the asset price will rise consistently over time. A bullish strategy is a good way to approach an underlying asset you believe is on an upward trend.

Trading Example The commodities market has just gone through a significant sell off in the past couple of hours and the price of gold has dipped below $1,397. Your analysis and experience leads you to believe that gold will rebound quickly and climb past $1,400 before the market closes in a few hours.

You decide to purchase a Call Option for Gold that expires in one hour. The option you are considering offers a return of 78%. You are quite confident in your prediction and decide to invest $1,000. If the option expires “In the Money�, you will receive $1,780. That is your initial investment of $1,000 plus a $780 profit.

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BASIC STRATEGIES

Bearish Strategy When you are bearish on an underlying asset, you believe the price of the asset will decline consistently over time. A bearish strategy is a good way to approach an underlying asset you believe is on a downward trend.

Trading Example After a morning of very little activity in the commodities market, a sudden buying frenzy has pushed the price of several commodities to unusually high levels. Gold is now trading at $1,415. Your analysis and experience leads you to conclude that this price is too high and gold will steadily move to a lower price throughout the rest of the trading day.

You decide to purchase a Put Option for Gold that expires in one hour. The option you are interested in offers a return of 75%. You are certain your forecast is right and decide to invest $1,000. If the option expires “In the Money”, you will receive $1,750. That is your initial investment of $1,000 plus a $750 profit.

Range / Volatility Trading Range trading is a popular way to approach assets that are experiencing significant fluctuations in their price. Also referred to as ‘volatility trading’, range trading is a good way to approach an underlying asset the price of which you believe is about to stabilize or otherwise experience a lot of volatility.

If you believe an underlying asset’s price is going to be very stable, you would purchase an In Range Option. If you believe an underlying asset’s price is going to be very volatile, you would purchase an Out Range Option.

Trading Example Gold opened this morning at $1,403 and over the past 3 hours has been very volatile, reaching prices as low as $1,389 and as high as $1,426. Currently, the price is $1,406 and your analysis and experience leads you to believe the price will continue to be volatile the rest of the trading day. The one-hour Range Option available on the Regal Options trading platform has a price range of $1,403 - $1,409. You predict that Gold will remain very volatile and will not be within this range in an hour and decide to invest $1,000 on an Out Range Option for Gold. The return calculated is 76%. If the option expires “In the Money”, you will receive $1,760. That is your initial investment of $1,000 plus a $760 profit.

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BASIC STRATEGIES

Fence Trading Fence trading is a method some traders use to create an opportunity to realize a profitable investment regardless of how an underlying asset performs. In fence trading, an investor would buy both a Call and a Put Option with the same underlying asset. The timing of the purchases is the key to realizing a profit in fence trading. Fence trading can be a good way to approach an underlying asset that is experiencing a lot of volatility.

Trading Example Gold is currently trading at $1,400 and you are confident its price will be higher in an hour. YYou decide to invest $1,000 on a Call Option with a 75% profit that expires in one hour. After 30 minutes, the price of Gold has reached $1,421 and you now believe it is time for the price to fall again. You invest another $1,000, this time on a Put Option with a 75% profit that expires in half an hour. If the price of Gold is between $1,400 and $1,421 in half an hour, both options will expire “In the Money”.

1st Scenario In half an hour the price of Gold is $1,412 and both the Call and Put Option expire “In the Money”. You receive a total of $3,500 from both investments. That is $2,000 from your initial investments plus a total profit of $1,500.

2nd Scenario In half an hour the price of Gold is $1,398 and the Call Option has expired “Out of the Money” while the Put Option has expired “In the Money”. You receive a total of $1,750.

That is $1,000 from your initial Put investment plus a $750 profit. After subtracting $1,000 for the investment in the Call Option, you have experienced a net loss of $250.

3rd Scenario In half an hour the price of Gold is $1,430 and the Put Option has expired “Out of the Money” while the Call Option has expired “In the Money”. You receive a total of $1,750. That is $1,000 from your initial Call investment plus a $750 profit. After subtracting $1,000 for the investment in the Put Option, you have experienced a net loss of $250. In this trading example, an investor only needs to be right on both investments one time in six to be profitable. Here is the math to show how this works: 5 X ($250) + 1 X $1,500 = $250

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MONEY MANAGEMENT

MONEY MANAGEMENT Money management is probably the most overlooked tool an investor can use to be successful. When a trader is realizing one profitable trade after another, it can be easy to forget that it only takes a couple of bad investments to lose all of your profits without an effective money management strategy.

There is no guarantee that any single Binary Option investment will be profitable. Every investment has risk and part of controlling that risk is managing your investment capital effectively. Here are some simple ways to get your money management strategy started on the right track:

Binary Options and Roulette Binary Options trading and roulette is not the same thing. There is no magic roulette strategy that you can use for your Binary Option investments.

Never Risk More Than 8.5% on One Trade By limiting the amount of each investment to 8.5% of your capital, you can experience 11 “Out of the Money” investments in a row and still have money available for trading. If your investment account has $10,000 in it, the biggest single Binary Option investment you should make is $850.

Confidence is Key Don’t initiate a trade just to get into action. Research and analyze every trade opportunity you are considering and invest only when you are completely confident in your forecast.

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MONEY MANAGEMENT

Diversify Don’t let yourself get married to a single underlying asset. Invest in several different assets within a market or over several different markets to spread your risk and increase your profit potential. If you are totally committed to Gold, for example, and the market suddenly turns against you, you could lose a significant portion of your investing capital very quickly.

Watch for Financial Announcements Keep an eye on the financial announcements that are being made and the experts are predicting will be made. Even if these announcements are not in the same market you do most of your trading in, they can often provide a clue as to how your preferred market will perform in the future.

Follow Trends Always be on the lookout for the emerging trends. If silver and copper start seeing steady price increases, perhaps gold will see its price start increasing as well.

Expect Losses No one can be right all the time. Losses will happen, don’t let them get you down. If you stay focused and diligently conduct your research and analysis, your profits will rule the day.

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TRADING HOURS

TRADING HOURS Because Regal Options is not tied to a single market or exchange, you are able to trade in Binary Options 7 days a week, 24 hours a day. The underlying assets are traded in different exchanges and markets around the globe so you don’t have to stop investing in stock Binary Options just because it is after 3 PM in New York.

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ABOUT US

ABOUT US Regal Options is a leading Binary Options trading platform that supports investing in commodities, currency pairs, market indices and stocks traded on open markets around the globe.

We have designed a trading platform that is secure, intuitive and provides investors with some of the most powerful features available in the Binary Options trading industry.

The Regal Options trading platform provides access to Digital, Range, Touch and Turbo trading instruments.

Investors have the ability to trade in Binary Options 7 days a week, 24 hours a day. Our Customer Support is recognized as the best in the business and is available whenever you need them during all trading hours.

We can’t wait to see you in the Regal Options trading rooms.

Happy investing!

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GLOSSARY

GLOSSARY Asset All binary options are based on assets. An asset may be a stock, a market index, a commodity or a currency pair.

At the Money Binary Option will close “At the Money” when the purchase price and the expiry price are identical. Investor does not realize a profit or suffer a loss when a Binary Option position expires “At the Money”.

Call Option Call Option predicts that the price of an asset will be higher than its purchase price when the Binary Option expires.

Digital Options Because Binary Options are sold almost exclusively over the Internet, they are sometimes referred to as the ‘Digital Options’. Digital Options provide investors with fixed profit and loss potential at the time they are purchased.

Expiry Price The last price the underlying asset is traded for prior to the Binary Option’s expiry time.

The expiry price will determine if the Binary Option was “In the Money” or “Out of the Money” for the investor.

Expiry Time The time and date when a Binary Option will expire. Also referred to as the “Time of Expiration”.

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GLOSSARY

Exotic Options A type of investment sold by brokers that is quite similar to Binary Options. As Binary Options are becoming more popular, exotic options are offered less frequently by brokers and exchanges.

Futures An indirect method of investing in an asset. Most futures contracts are based on commodities like cotton, oil or gold. The investor will purchase a futures contract that requires them to either buy or sell the underlying asset at a specific time in the future. The difference between the actual price of the asset and the price the investor paid when they purchased the futures contract will determine if the investment is profitable or not. The difference in prices will also determine how much profit or loss the investor realizes on the trade.

Fundamental Analysis A method of analyzing the current and future value of a particular asset. Fundamental analysis relies on macroeconomic principles to predict the asset’s future price and trends. Fundamental analysis examines things like politics, national and regional economic health, banking decisions and other macroevents to predict how an asset will perform in the future. With this information, an investor can determine what Binary Options are likely to be profitable for a given asset.

Investment Amount Investment amount is the price an investor pays to purchase a Binary Option’s position.

In the Money A situation where the price of an asset at expiration meets the criteria established in the Binary Option’s position to be profitable. When a Binary Option expires “In the Money”, the investor will collect a profit. The profit is calculated as a percentage of the initial investment.

Over the Counter (OTC) Over the counter describes a situation where products are sold directly from one party to another. Most global market investments are not sold over the counter, instead

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GLOSSARY

a broker or exchange facilitates the transaction between the parties and receives a fee for this service. Binary Options are sold online in and over the counter transaction.

Out of the Money A situation where the price of an asset at expiration does not meet the criteria established in the Binary Option’s position to be profitable. When a Binary Option expires “Out of the Money”, the investor will experience a loss. In most cases, 80% - 100% of the initial investment will be lost.

Payout The payout represents the investor’s profit. When a Binary Option expires, the investor will receive a payout for their investment if the option expires “In the Money”. In most cases, the payout will be 75% - 81% of the initial investment.

Put Option A Put Option predicts that the price of an asset will be lower than its purchase price when the Binary Option expires.

Strike Price In the Binary Options world, the strike price is the price of the option at expiration. The strike price will determine if the option is profitable or not. In some cases, the strike price is also a target price. A Touch Option, for instance, will expire automatically when the underlying asset reaches the predefined strike price.

Time of Expiration The date and time when a binary option will expire. Also referred to as the “Expiry Time”.

Technical Analysis A method of analyzing the current and future value of an asset. Technical analysis will often focus on market price as the key indicator of how an asset will perform in the future and, consequently, what Binary Option positions are likely to be profitable.

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