Binary Options have been around for a while now but recently (since 2008) have been a hit among the new traders. They were originally introduced as Digital Options and basically, binary means 2 values and in the case of finance mean up and down. This series will be dedicated to teaching the logistics of Trading Binary Options, the in’s and out’s along with various Binary Options Trading Strategies. Since Binary Options are derivatives (rely on underlying assets), the lessons outlined here may overlap with other series. Especially the case with Forex since that is the market that I focus my attention on because I find it easier to use Forex as the underlying asset for Binary Options Trading compared to other markets. Thus, the lessons here will give you the ability to trade Forex Binary Options.
A binary option is a type of option where the trader takes a yes or no position on the price of a financial asset, and the resulting payoff is all or nothing. Because of this characteristic, binary options can be easier to understand and trade than traditional options. Binary options are cash-settled as European-style options, meaning they can be exercised only on the expiration date. If at expiration the option settles “in the money,” the buyer or seller of the option receives a pre-specified amount of money. Similarly, if the option settles “out of the money,” the buyer or seller receives nothing. This allows for a known upside (gain) or downside (loss) risk assessment. Unlike traditional options, a binary option provides full payout no matter how far the asset price settles above or below the “strike” (or target) price. Despite the term “all or nothing,” depending on the actual trading platform, “nothing” can actually mean “something.” This means that at expiration the owner of the option may actually get a certain payout even if the option expired “out of the money”. Very often you may encounter binary options under another name. In the foreign exchange market binary options are known as digital options.
How to Understand Binary Options?
- Binary options – the world’s easiest financial instrument. They allow traders to profit from price movements across all the world’s markets
- There are only 2 types of transactions you can make with binary options: CALL and PUT. The IQ Option platform allows our traders to make investments starting from just $1. The rate of return can be adjusted, that way losing trades will return a defined percentage into the trader’s account.
- Call – Option for rising prices. If you believe the price is about to go up, choose this option.
- Never invest more than 2% of your capital in a single option. This is the golden rule for any investor. This way you can manage your investing without losing your head…or your money
- If 60% of your transactions end up “in the money” then you will be consistently profitable, and you may gradually increase your investment amount.
- In order to improve the quality of your results, use technical & fundamental market analysis.
- Try different asset classes. If you’re not getting results with currency pairs, try stock indices. On IQ Option you can find over 70 types of assets, including Amazon, Facebook, and Google.
- Sign up for IQ Option’s free trading webinars, where you’ll find out how to analyze trends, choose a trading strategy, and personally answer any questions you may have.
IQ Option Review
IQ Option – the leading broker оf binary options, presenting the world its own modern and user-friendly trading platform developed by a group of leading traders, analysts and IT-specialists. The platform is suitable for both professional traders and beginners alike. On the platform you can trade both classic binary options on a variety of assets (indices, currencies, equities) and the recently popular turbo options (60 seconds). IQ Option’s asset list is unique in that it also offers the Bitcoin Index, which allows you to trade not only during standard market trading hours, but at any other time – including weekends.
The main advantages of IQ Option:
- Free Demo Account – practice before trading with real money
- Minimum deposit – $10
- Minimum Transaction – $1
- The maximum rate of return on the transaction – 92%
- Deposit bonuses up to 150%
- Regulated by CySeC FMRRC
- You can buy binary options on all types of assets:
- currency pairs, including: EUR / USD, GPB / USD, EUR / JPY, USD / CHF, AUD / CAD, etc.
- Commodities: Gold and Silver
- Indices, including: FTSE 100, DAX, CAC 40, Dow Jones, S & P 500, Nikkei-225, NASDAQ100.
- Shares of 50 companies including: Barclays, Gazprom, Daimler, Orange, Apple, Google etc.
The professional team of analysts and account managers IQ Option work every day to provide traders with personal finance advice, information on the latest news and trading signals. You can take free training webinars to get acquainted with the peculiarities of the binary options market, important trading techniques, terminology and common rookie mistake to be avoided.
Recover up to 45% of your investment on losing trades.
The IQ Option support team works during the operating hours of main stock exchanges: Weekdays from 9:00 to 23:00.
Methods of deposits and withdrawals: Bank cards, Webmoney, YandexMoney, QIWI, PayPal, Liqpay, Skrillex, Moneta and more.
You can get an IQ Option VIP-Account, which means personal service and training, higher payouts, and accelerated withdrawals (just 1 day) by making a deposit of $1,000 or more.
IQ Option developed our own system of education that is available to everyone on the site in both text and video formats. The curriculum includes: An introduction to binary options and the basic concepts used by traders; the main methods of market analysis; methods of money management; common trading strategies and tactics.
One of IQ Option’s latest innovations is the of weekly tournament on turbo options, where anyone can compete for the grand prize, trading on any or every asset. A tournament lasts 30 minutes, the result is determined by the trading balances of the players at the end of the tournament. Tournament winners receive cash prizes.