BASICS OF BINARY OPTIONS TRADING INTRODUCTION TO BINARY OPTIONS TRADING Option Banque Training Series Vol. 1
INTRODUCTION TO BINARY OPTIONS TRADING Binary Options as the name of financial instruments, sounds complicated, but in reality, they are not at all complex. Binary options allow trading in currencies, stock indices, commodities, bonds and shares even economic events with a relatively small amount of money and limited risk. Generally speaking, all a trader needs to do is estimate the possible direction of the markets from any given point. Hence Binary Options trading carries just two investment possibilities. When a trader estimates that the price of the asset will rise, the investment/trade made corresponding to that, is termed asbuying a Call option. The other possibility is presented when a trader estimates that the price of the asset will fall, and trades/invests to benefit from it, this type of investment/trade is called the buying of a Put option. WHY CHOOSE BINARY OPTIONS? There are some reasons why binary options should be preferred for investment, let s discuss them briefly; Simple Concept. Technically binary option trading is a lot easier than trading directly in the underlying assets, for example foreign exchange, because there are no concerns related to the time value decay of options,no technical jargons, no/very few emotions involved in stopping losses or letting profits run, no patterns or day trading rules(related to the products traded etc. Higher Returns. With binary Options, the average ROI tends to be between 65% and 90%, for most assetsover 1 hour of investing time. It is rare for any other financial instrument to offer comparable returns within similar time-frames. Returns can go as high as 700% for longer maturities. No hidden charges, no commission. With binary options trading, you do not need to pay any brokerage commission ever! Your invested amount, your returns, your trades are free from brokerage commission and there is no other hidden charge on them. 1
Easier Risk Management. With binary options trading you decide and state the investment amount for a fixed return (profit) with your invested amount returned to you if your investment decision is correct. For example, you invested $50 with a return rate of 70% and an insurance rate of 10% if your investment decision is correct (i.e. the option expires in the money), you will get your $50 invested amount back, along with the 70% profit of $35.Thus the total cash return to you is $85. Similarly, if your investment decision is incorrect (i.e. the option expires out of money), you will only get back $5 being the 10% insurance amount. Note: Not all brokers offer insurance on trade losses. With this, you know precisely, how much your risk exposure is, and your returns and you can invest based on your risk preference per se. Trading binary options is easy. Binary options do not rely on luck. What you need to do is to study the behavior of the asset that interests you. With binary options, you do not need the knowledge of an analyst or forecaster to turn your investment in binary options into a profit. The only knowledge you really need is to be able to estimate the direction that the price ofyour chosen asset will move in, for the duration of your trade/investment. If you take time to watch the asset you want to invest in and can reasonably estimate the direction of the price (using analytical trading tools, of course) then you could be like many other successful investors trading in binary options, and creating a complementary income stream for yourself. Binary options trading is available 24/7. Option Banque allows trading in high yield weekend options offering lucrative return of 500%-800%. You can trade options anytime throughout the week unlike forex or any other financial trading market. 2
TRADING HOURS FOR BINARY OPTIONS TRADING The trading hours for binary options depend on the hours in which the underlying assets for binary options are traded. Currencies are a 24 hour market, so currencies are available for trading as binary options the whole day, 7 days a week (weekend options over the weekend). Stocks are traded for between 6-8 hours a day, depending on the stock exchange where the stock is traded. In the United States, this is from 1.30 GMT to 8.00 GMT. In Europe, this is from 8 am GMT to 3/4 PM GMT. For stock index futures, the trading hours correspond to the hours of operation of the individual markets. CONCLUSION Exclusive and exotic options are also available on all the above mentioned assets even during off-market hours/days(in cases where the underlying markets are not open, at any given point in time). 3
RISK DISCLOSURE: Option Banque does not assume any responsibility for any loss or damage arising by following the information provided by Option Banque. This includes The Educational Material, Price Quotes, Charts and Analysis. Please be aware of the risks associated with trading the financial markets; never invest more money than you can risk losing. 4