Latest binary options news
Speculating on Asset Price Volatility using Binary Options Part II – Trading Double No-Touch Options Introduction As the retail binary options market becomes more knowledgeable the demand for using these limited risk strategies to speculate on asset price volatility (“vol”) will also increase. This article is the second in a four part series that will illustrate how various binary option strategies can enable traders […]
Speculating on Asset Price Volatility using Binary Options Part I – Trading Tunnel Options Introduction As the retail binary options market becomes more knowledgeable the demand for using these limited risk strategies to speculate on asset price volatility (“vol”) will also increase. This article is the first in a four part series that will illustrate how various binary option strategies can enable traders to […]
OptionFair Charts NZD/USD OptionFair Charts 17-06-2015: According to Christopher Lewis analysis of the NZD/USD, “I think that if we can break below the lows from last week, we will continue to grind our way down to the 0.68 level, which has some historical significance. I believe we go below there and hit the 0.65 level after that”. That creates an investment opportunity on the […]
What Are Binary Options? It is doubtful whether there has ever been a capital markets instrument that has had as much tosh written about it as the enigmatic binary option. The internet has been flooded with articles written by low quality ‘content writers’ lauding the simplicity of the instrument accompanied by ‘call-to-action’s. Unfortunately some of these ‘call-to-action’s have been along the lines of “Enhance […]
TraderWorld Review TraderWorld is a CySec fully-regulated, London-based binary options brokerage. They use the SpotOption award-winning technology enabling investors to trade multiple assets under one online platform. TraderWorld has a good reputation primarily in that it is based in London and subsequently offers a transparent and professional service. Their experienced team all have a minimum of 2 years working in the industry so the […]
What are Binary Options?
Binary options, also known as digital options or fixed-return options, are fixed-odds financial instruments that allow individuals to bet on the movement of an underlying market asset. The most popular assets traded in the industry include indices, stocks, commodities (i.e. gold and oil) and Forex.
The fixed-returns options industry has become increasingly popular over the last few years because they provide investors a low-cost, low-risk way of betting on the financial markets. Investors in the industry receive fixed-odds returns, which minimises the amount a trader can lose in a single trade. This contrasts with high-risk trading such as Forex and spread betting, which is traded on leverage. Overall, binary trading provides a safer way for beginners to bet on the financial markets.
The payout of these trades is determined by the platform before the trade is executed as a percentage, usually ranging from 70-85%. This determines the size of the return for a winning option.
Types of Binary Bets:
In 2014, binary options brokers offer a greater range of options on their platform with different characteristics and payouts to suit an individual's trading style. This also includes 60-second options, option builder, and weekend options.
High-Low (Call/Put): The most popular binary trade is the high-low option, where an individual can bet on whether an underlying asset will finish above (Call) or below (Put) a certain price in a given period of time. .
One Touch: The one-touch option pays out when the underlying asset hits a certain price at anytime during the trading period.
Tunnel or Range Option: First of all the trader sets up a high boundary and a low boundary for his trade. If the underlying assets stays within these ranges for the entire trading period (without touching the boundaries) then he wins a pay-out. The tunnel bet is essentially a way for traders to bet on the volatility of the market.
Target: In contrast to a tunnel bet, a target bet pays out in the money when the price hits a specific level determined by the individual. He/she can either set a higher target price if he thinks the market is bullish or a lower target price if the market is bearish.
Useful External Resources
- Chicago Board Options Exchange (CBOE)
- Cyprus Securities and Exchange Commission (CySEC) - Responsible for the regulation of most Over the Counter brokers.
BinaryOptions.com is a leading binary options trading, education and news portal, launched in 2011. Our site is run by a dedicated team of professional options traders and has been providing you with advanced trading strategies, articles and news for several years now.
Beginners can choose a broker and find a range of trading articles in our trading education section, while developing traders can check out our trading strategies section. If you are a more advanced or experienced trader, then we have an advanced binary options strategy site under development. We are in the process of removing that content from this site.