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Binary Options Basics - What are 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.



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Risk Disclosure: Binary Options Directory will not accept any liability for loss or damage as a result of reliance on the information contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets. Before deciding to trade any other financial instrument you should carefully consider your investment objectives, level of experience and risk appetite.