Binary options are a simple way to trade price fluctuations in multiple global markets, but a trader needs to understand the risks and rewards of these often-misunderstood instruments. Binary options are different from traditional options. If traded, one will find these options have different payouts, fees and risks, not to mention an entirely different liquidity structure and investment process
Binary options are classed as exotic options, yet binaries are extremely simple to use and understand functionally. The most common binary option is a "high-low" option. Providing access to stocks, indices, commodities and foreign exchange, a high-low binary option is also called a fixed-return option. This is because the option has an expiry date/time and also what is called a strike price. If a trader wagers correctly on the market's direction and the price at the time of expiry is on the correct side of the strike price, the trader is paid a fixed return regardless of how much the instrument moved. A trader who wagers incorrectly on the market's direction loses her/his investment.
If a trader believes the market is rising, she/he would purchase a call. If the trader believes the market is falling, she/he would buy a put. For a call to make money, the price must be above the strike price at the expiry time. For a put to make money, the price must be below the strike price at the expiry time. The strike price, expiry, payout and risk are all disclosed at the trade's outset. For most high-low binary options outside the U.S., the strike price is the current price or rate of the underlying financial product, such as the S&P 500 index, EUR/USD currency pair or a particular stock. Therefore, the trader is wagering whether the future price at expiry will be higher or lower than the current price.
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May 29, 2017
May 29, 2017
HIGH RISK WARNING: BIT COIN OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISKS. THE HIGH DEGREE OF LEVERAGE CAN WORK AGAINST YOU AS WELL AS FOR YOU. YOU MUST BE AWARE OF THE RISKS OF INVESTING IN BIT COIN OPTIONS , BIT COIN OPTIONS AND BE WILLING TO ACCEPT THEM IN ORDER TO TRADE IN THESE MARKETS. BITCOIN TRADING INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS. PLEASE DO NOT TRADE WITH BORROWED MONEY OR MONEY YOU CANNOT AFFORD TO LOSE. ANY OPINIONS, NEWS, RESEARCH, ANALYSIS, PRICES, OR OTHER INFORMATION CONTAINED ON THIS WEBSITE IS PROVIDED AS GENERAL MARKET COMMENTARY AND DOES NOT CONSTITUTE INVESTMENT ADVICE. WE WILL NOT ACCEPT LIABILITY FOR ANY LOSS OR DAMAGE, INCLUDING WITHOUT LIMITATION TO, ANY LOSS OF PROFIT, WHICH MAY ARISE DIRECTLY OR INDIRECTLY FROM THE USE OF OR RELIANCE ON SUCH INFORMATION. PLEASE REMEMBER THAT THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS