What are binary options?

Transcription

1 What are binary options? Binary Options, also known as Digital Options, all-or-nothing options, or Fixed Return Options (FROs). The Binary Option is in essence nothing more than a prediction on which way the price of a stock, commodity, index, or a foreign currency will move by a designated expiration time.

2 Binary options With Binary Options, a trader never purchases or owns the asset as he is only predicting the direction that the asset will go. There are only two possible outcomes (up or down), and the price of the asset does not matter. As far as a trader is concerned, all that matters is if his prediction was correct, or incorrect. If he predicted correctly, then the trade is considered "in the money", and the trader will receive the fixed return on his investment. If he predicted incorrectly, then the trade is considered "out of the money", and he will lose the amount agreed upon in the option.

3 History Binary Options has been offered to investors by banks and financial investing firms already back in the early 20 th century.

4 Basic Terms Underlying Asset: a commodity, index, stock, currency pair or any other financial asset that constitutes the basis for creating an option. Expiry Level (Rate): the expiry level is the level of the underlying asset at the time of expiry of the asset according to Reuters. This is the determining level if the option has expired in-the-money or out-of-themoney. A different expiry level is determined for each underlying asset. Entry Rate (Price): the level of the underlying asset at the time of the execution of the trade according to Reuters and according to market s conditions. Expiry Time: expiry time is the time and date at which an option expires.

5 Basic Terms Call Option: an option that provides the holder with a profit when the underlying asset increases in price compared with the level at which it was purchased. 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.

6 Asset Types Currencies: a pair of foreign exchange currencies rate. For example, Euro vs. U.S Dollar. This pairing will be marked EUR/USD. The currency on the left will be always called Base Currency, and the rate we will trade for will always be this currency price on the market.

7 Asset Types Commodities Major international commodities indexes such as: Gold, Silver, Oil, Sugar, Coffee, Wheat, Platinum etc. The trading on commodities is based on each asset price unit. e.g Oil barrel, Gold Ounce etc.

8 Asset Types Index each index asset, represents a price/rate of a group of stocks traded in one of the stocks exchange markets. For example- Nasdaq Future represents the index of the 100 largest domestic and international, non financial companies registered in Wall Street (The primer US stocks exchange in NY). Tel Aviv 25 the index of the major 25 stocks in Tel Aviv Stock Exchange.

9 Asset Types Stocks: Single stocks of major international companies indexes. e.g: GM, BP, Google, Apple, Barclays, Tesco etc.

10 Classic Binary Options

11 Classic Binary Options Asset Entry Rate Expiry Time Payout Rate

12 Classic Binary Options In order to commit a classic binary options trade, the trader should: 1. Choose the type of the asset he wants to trade. Currencies, commodities, indices or stocks. 2. Choose the specific asset from the drop down menu list:

13 Classic Binary Options

14 Classic Binary Options 3. Choose an expire time from the drop down menu given list:

15 Classic Binary Options 4. Decide if the rate will go up or down and choose Call or Put accordingly:

16 Classic Binary Options 5. The trade confirmation window will be open on the right side of the screen. The trader will has to insert the investment amount (minimum 25 maximum 1,500) and click Apply.

17 Classic Binary Options 6. The trader will receive, for 3 seconds only, a last chance to cancel the trade. A countdown meter will be shown for 3 seconds. If the cancel bottom will not be clicked, the trade will go off to the market.

18 Classic Binary Options On the right side of the screen, the trader will be able to see all his open positions and to monitor them until they will expire.

19 Classic Binary Options Roll Over The Roll Over feature is enable trader to extend the expiration time of the position to one of the next options. This option applies to certain conditions only: 1. An additional 30% will be added automatically to the initial investment. 2. The trader has to be in a loosing position in order to use the Roll Over. 3. The trader can t Roll Over to the last expiry time of the day. 4. The trader can only roll over once each position.

20 Classic Binary Options Double Up This feature is enable trader to increase the initial investment. The trader can double up his investment amount at any time. The double up will count on the current rate and not on the rate the trader had when he s executed the trade.

21 Option Builder Asset Expire Time Risk Level Investment

22 Option Builder Option Builder allows trader to create his own, custom made, trading option. In Option Builder the trader can choose: 1. The exact asset to trade 2. The exact expiry time (in 5 Min intervals) 3. The risk level from a wide variety of risk spreads

23 Option Builder Choose Asset

24 Option Builder Choose Expire Time

25 Option Builder Choose Risk Level

26 Option Builder Choose Investment Amount

27 Option Builder Choose Call/Up or Put/Down

28 Option Builder Click Apply to Confirm the Trade

29 Option Builder 3 Seconds Cancellation

30 One Touch Options This feature allows: 1. Offering our traders, the trading options: 24/7 At the after hours, when all financial markets are close During weekends and holydays 2. Offering payout rates of 300%-700% 3. Availability for daily options and weekly options

31 One Touch Options Asset Current rate Only one Direction Payout Rate Goal Rate Last Time to open the position Expiry Time Investment amount

32 One Touch Options Choose Position

33 One Touch Options Choose Investment Amount

34 One Touch Options Click Apply

35 One Touch Options Get Confirmation

36 Pro Trader

37 60 Seconds