Latest binary options news
Having offices in both Gibraltar and London, RedWood Options is one of the leading online binary options brokers available in the current marketplace. This platform offers a notably user-friendly interface and their tools require no download to use; RedWood Options is entirely based in the cloud. Let us take a closer look at some of the main amenities that this company provides to binary […]
Binary Options v Spread Betting A Potted History Spread betting was introduced by Stuart Wheeler, the founder of IG Index, while working on the floor of the old London Stock Exchange. He basically offered futures which had the distinction of a variable tick value. Since then the spread betting industry has flourished specifically in the UK where spread betting profits are tax-free. Binary options […]
The world of binary options can be one of the most lucrative and rewarding market sectors to become involved in. Indeed, the rather “fixed amount or nothing” aspect of this method is quite appealing to both novice traders and astute investors alike. These two possible outcomes are vastly different than other equities and securities trading that entail a great many other variables which must […]
Binary options trading provide investors with a flexible trading platform that also offers them considerably great returns. The concept behind this type of trading is straightforward but despite that, it is important to get acquainted with the techniques involved because trading without sufficient knowledge may bring about a negative outcome. In connection with this, here are the trends associated with binary options trading. Bullish […]
When we place a derivatives trade, we are of course counting on the price rising substantially within a certain period of time. In the world of binary options, this is the key principle behind maintaining a secure and profitable position. However, there is much more to these mechanics than simply “predicting” that the price of a certain position will remain bullish into the near […]
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, digital options 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 2013, 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.
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Beginners can choose a broker find a range of trading articles in our education section, meanwhile experienced traders can learn about trading strategies and Greeks under the “Advanced” section.
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