A binary option, digital option or a fixed return option is trading instrument with which the payout is determined before the initial investment is made. The amount is fixed, but the percentage depends on the specific binary options broker. The payouts are usually between 65-85%. The winning trade occurs when the trade expires, regardless of the volume by which the chosen asset moves.
Underlying assets are divided into commodities, indices, stocks, currencies and other financial assets that establish the basis for crafting an option.
A put option is an option that generates profit when the underlying asset rises in price compared with the number it was bought at. If the option expires precisely at the same price, the initial investment will be reimbursed to the trader.
Unlike call option, the trader makes a profit when the underlying asset depreciates in relation to the acquisition level. In the event that the option expires at exactly the same price, the full original investment amount will be returned to the investor.
The size of the investment on a given option.
In order to invest, you have to choose between "call" or "put" options in order to trade a given underlying asset. Hitting the call/put button will open up a sheet on the screen and you will be asked to enter the size of your investment and to consequently approve the trade. You usually have the option to cancel the trade by hitting"X" at any time before approving the investment.
A successful trade will lead to a return predetermined on the broker's website. If the option expires "out-of-the-money", you may get anywhere between 0-15% back from your initial investment.
The expiry level is the level determined by your choice of a trading method. For instance, if you choose 60 seconds, then the asset expires in 60 seconds, and so on.
The binary option broker's website's trading hours are displayed based on your PC, mobile, tablet or other device's time zone.
Assets are always available for investors during trading hours. When the assets are not available this is due to the fact that the markets where they are traded are closed. Occasionally, assets are not accessible due to technical reasons. Such problems are generally momentary and rapidly fixed.
Choosing a binary option broker can be a daunting task considering the number of different brokers available to prospective traders. Make sure to look at the general reputation of the brokers by perusing our list of reputable brokers. You should also determine the payout percentages, bonuses, customer support and regulation of the brokers.
Even though there are only two imaginable outcomes when it comes to binary options trading, such outcomes are based on specific variables such as world news, weather forecasts, local economic circumstances, market behavior, trends, and many others.
Binary Options trades are usually short term, which makes it hard to analyze assets lacking significant market volume. Therefore most binary brokers offer assets that have considerably higher trading volumes. This offers traders the best chance to make significant profits.
At the present time people over the legal age of 18 are legally eligible to trade binary options, but one's country of residence limits this option. For instance, due to legislative restrictions, binary option trading is not legal in the U.S.
Expiry times on binary options go from 60 seconds to 24hours. Different brokers offer a variety of ranges, but the most common are 15min, 30min, 1hr, 24hr. Depending on your level of patience, there are dozens of options.