WHY TRADE BINARY OPTIONS?
How about if I give you a lottery ticket with a chance to win of at lease 50%? Would you take it? Of course you will. How about if I will also give you some tools to predict the winning numbers…Is that great? Of course it is because your chances to win improve greatly, how much? Depending on how much you learn, who is your coach? what are the commissions and spreads of the broker?, what is the efficiency of the trading platform?, and the ability to recognize signals to stay or close the trade timely. If you have traded options before, then Forex binary options is not a new thing, it has features of stock option spreads (believed to be one of the most consistent profitable strategy in stock option trading). You give your prediction of whether or not the price of the asset you are trading will be above or below the current price you see now (called strike price) in an hour from now, and put a small investment (say $10) or a larger one(not exceeding $2000.00). If after an hour your predicted price end in the money (ITM) you get return on your investment between 75% & 85%, and if your predicted price ends up out of the money(OTM) you loose your investment or get a very small fee (say $5.00) or % of your investment. ITM & OTM are explained in the article below.
In conclusions, Binary options or digital options, as derived from their name, are options that pay out a fixed return, depending on whether a certain condition has been fulfilled by the time the option expires. For example, you can speculate on $100 that Google price will be higher than the current last price in one hour from now. If you are correct, you will receive up to 81% payout on your initial investment. On the other hand, If in one hour from now Google last price will be lower than the current last price, You will keep up to 10% of you initial investment amount.
How to Trade Binary Options
(Article after basic options brokers site)
The latest craze in the financial markets brings a new level of excitement to the markets. It’s called binary option trading and allows you to trade your views on the financial markets without needing a complex setup.
Binary Options are a much more simplified and advantageous way of trading currency pairs than traditional Forex trading. Whether you are a novice Forex trader looking for a more simplified way to succeed or an advanced Forex trader looking for a more profitable Risk/Reward ratio, you need to give Binary Options a try.
For novice Forex trading, trading is as simple as 1,2,3. First, choose the market that you want to trade, for example Currencies. Second, choose the asset, for example EUR/USD. Third, decide whether the EUR/USD will end above or below its current price at the end of the hour. If you decide above, choose a Call Binary Option. If you decide below, choose a Put Binary Option.

 

 

 

So, for example: you would be considered “in the money” in the two following cases:
In the Money: Assuming you choose CALL (Above) – At expiry if the closing price closes above the price that you purchased
In the Money: Assuming you choose PUT (Below) – At expiry if the closing price closes below
For advanced Forex trading, three obvious advantages should attract you to Binary Options. First, a small breakout or trend will give you a fixed 81% return. Second, no leverage is involved so you can enjoy 81% returns without risking any more than your single trade amount. This is a huge deal to those of us who don’t know exactly where to place that Stop-Loss fearing that we will get shaken out of our trade. Third, Binary Options are quickly becoming popular as hedging instruments for traditional Forex trades since they offer a fixed Risk/Reward ratio. For example, taking a traditional EUR/USD long position with a Stop/Loss combined with a Put Binary Option can cover your losses or even be profitable in the event that your long position fails.

 

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