- What are Digital and Binary Options?
Binary options are a simple and rewarding financial trading product. Binary options deliver a fixed return on every trade which is made, depending on whether the trade was “In The Money”, “Out Of The Money” or a “Tie”. Binary options – which are also referred to as digital options – are one of the fastest growing financial trading products in the world because their simplicity, together with the certainty which they offer on every trade, makes them an attractive trading tool for many financial investors.
When buying a binary option the potential return it offers is certain and known before the purchase is made. Binary options can be bought on virtually any financial product and can be bought in both directions of trade either by buying a “Call”/“Up” option or a “Put”/“Down” option. This means that an investor can go long or short on any financial product simply by buying a binary option. Binary options are offered against a fixed expiry time which may be e.g. 5-30 minutes in the future, an hour ahead or at the close of the trading day. Binary options once bought cannot be resold before the expiry time is reached.
- What is an Underlying Asset?
Assets are any tradeble products which a financial market can be based upon. The most common assets which are traded through financial markets are commodities (e.g. gold, oil, platinum), stocks (e.g. Microsoft, Nike, Citi, Coca Cola), currency pairs (e.g. euro-dollar, dollar-yen), stock indices (e.g. NASDAQ, Dow Jones, FTSE) and bonds.
In binary options trading, investors buy options on individual assets on a fixed expiry time in order to try and benefit from the price changes which are occurring within the underlying asset.
- What Assets Can I Purchase Options For?
There are a wide range of Stocks (e.g. Microsoft, Nike, Citi, Coca Cola), currency pairs (e.g. euro-dollar, dollar-yen), stock indices (e.g. NASDAQ, Dow Jones, FTSE) and commodities (e.g. gold, oil, platinum) that you can trade online using Binary Option Brokers
- What is a CALL Option?
An option that provides the holder with a profit when the underlying asset increases in price compared with the level it was purchased at. In the event that the option expires exactly at the same price, the full original investment amount will be returned to the investor.
- What is a PUT Option?
An option that provides the holder with a profit when the underlying asset depreciates relative to the purchase level. In the event that the option expires at exactly the same price, the full original investment amount will be returned to the investor.
- How do I invest?
To invest, you must choose between “CALL” or “PUT” options for a given underlying asset. After clicking on the CALL/PUT button, enter the amount of the investment and approve the execution
- What is the Amount of Investment?
The Amount of Investment is the amount of funds you commit to the transaction. In a successful trade the payout is based on this amount and in an unsuccessful trade this is the most you can lose. (Some brokers pay back up to 15% on unsuccessful trades). For good financial management it is advised not to place more than 5% of your capital on any individual trade.
- What level of Payout can I expect?
Payouts vary from broker to broker, but in general, traders can expect to generate returns of 65% to 85% for binary options that end up in the money. Some brokers have payouts up to 95% for Standard Options and up to 500% for One Touch Options
- What are the Advantages of Trading Binary Options?
Binary Options have many advantages including:
- Predefined Payout – the returns are known in advance
- Limited Risk -You cannot lose more than you invested
- High Returns – It is possible to earn returns of up to 95% on Standard Options and 500% on One Touch Options
- Fast Returns – many brokers now offer 60 second trades together with 15 minute and hourly trades so fast profits can be earned on trending markets
- Novice Trader Friendly – Binary Options Trading is easy for new traders to understand and most platforms are highly user friendly. Simply pick an asset, make your prediction and choose how much to invest
- Wide Range of Popular Assets – including the main Indices, Currencies, Stocks and Commodities
- How do I Deposit and Withdraw?
Most brokers allow deposits and withdrawals via a variety of methods including Credit & Debit cards, Moneybookers & other eWallets and Wire Transfers from and to your bank account