How To Trade Binary Stock Options

What are binary options

A binary option is a type of option with a fixed payout in which you predict the outcome from ii possible results. If your prediction is correct, you receive the agreed payout. If not, yous lose your initial stake, and nothing more than. It’south chosen ‘binary’ because there can be just ii outcomes – win or lose.

Advantages of binary options trading

Aside from the simplicity of its ‘yes or no’ proposition, binary options trading is also very flexible. It gives y’all the ability to trade:

Why yous should trade binary options with Binary.com

Bask an honour-winning online trading platform with trading weather that are ideal for new and experienced traders.

Award-winning online trading platform

• Simple and intuitive
  
  Relish a trading platform that’s easy to navigate and use.
• Instant access
  
  Open an business relationship and start trading in minutes.
• Bachelor 24/7
  
  Trade when you desire. Our Synthetic Indices are available even on weekends.
• Patented engineering science
  
  Merchandise with the industry pioneer and holder of a patented pricing technology.
• Security and privacy
  
  Trade confidently, knowing that your personal data, transactions, and funds are e’er secure.

All atmospheric condition and durations

• All markets and conditions
  
  Trade currencies, stock indices, commodities and more in rise, falling, sideways, placidity, and volatile markets.
• Short to long-term durations
  
  Choose timeframes from 10 seconds to 365 days.

Competitive and transparent pricing

• Sharp, benchmarked prices
  
  Receive prices that are benchmarked against interbank rates.
• Transparent risk and potential reward
  
  Know how much yous will win or lose before yous purchase the contract.
• Protect your profits
  
  Sell your long-term contracts earlier expiry to protect any profits you may have made or to minimise your losses.
• Two-manner pricing
  
  Receive quotes for a trade and countertrade, and then you always go unbiased, transparent rates.

Platonic for new and experienced traders

• Low minimum stakes
  
  Deposit every bit little as five USD to start trading.
• Trade according to your preferred strategy
  
  Trade based on “gut experience” or rely on technical and fundamental assay.
• Flexible
  
  Cull from over one 1000000 possible trade variations at any time, and customise your trades according to your preferred strategy.
• Scalable
  
  Earn the aforementioned proportional return on stakes of all values.

How to merchandise binary options

Binary options trading is relatively piece of cake. You can purchase a contract in merely three steps:

Step ane: Define your position

The beginning pace is to prepare the parameters of your trade. There are five trade parameters you need to adjust in order to receive a toll for the contract:

Choose from four available markets:

• Forex
  
  Major and minor pairs, plus Smart FX indices
• Stock Indices
  
  All major worldwide stock indices sourced from the over-the-counter market place
• Commodities
  
  Major commodities such as gold, silver, and oil
• Synthetic Indices
  
  Our proprietary constructed indices that simulate marketplace forces

Choose from three principal trade types:

• Upwardly/Down
  
  Predict if the marketplace will rise or fall from its current level, or if it will end higher or lower than a toll target.
• Touch on/No touch
  
  Predict if the marketplace volition touch or not bear upon a price target.
• In/Out
  
  Predict if the market will stay between or go outside ii toll targets.

Aside from the iii chief trade types higher up, y’all likewise go Asians and Digits trade types exclusively with our Synthetic Indices.

Prepare the length of your trade from 10 seconds to 365 days, whether you lot have a short-term or long-term view of the markets.

Set up barrier(s) to define your position and trigger the payout you lot’ll receive.

Choose the payout yous wish to receive from correctly predicting this contract.

Step ii: Get your cost

The cost of the contract is automatically calculated by our patented pricing technology based on the parameters y’all’ve divers in Pace 1. Our prices are benchmarked against the interbank options market, so you always get the nearly competitive prices. This ways that you’ll always receive fair and transparent pricing, whatever your position.

Step 3: Brand your trade

When you lot are satisfied with the price that yous receive, execute your merchandise immediately. With our unique platform, in that location’s no risk of ‘slippage’ or gaping markets. And most importantly, there are no subconscious fees. You can also sell back any long-term trades at any fourth dimension to profit from favourable market atmospheric condition.

Types of trades

Binary.com offers the following trade types that will assist you execute your market place view or strategy:

Delight note that Asians, Digits, Reset Call/Reset Put, High Ticks/Low Ticks, and Just Ups/Only Downs are available exclusively with our Constructed Indices.

Range of markets

Binary options let you lot to merchandise on a wide range of underlying markets. Ane of the advantages of trading binary options is that you are non buying or selling an actual asset, just a contract that determines how that asset performs over a period of time. This limits your run a risk and makes it easy for anyone to start trading.

Available markets

Forex

Trade popular major and minor currency pairs, plus Smart FX indices – weighted indices that measure the value of a currency against a basket of major currencies.

There are four types of Smart FX indices that y’all can merchandise:

• AUD Index – Measures the value of the Australian dollar against a basket of five global currencies (USD, EUR, GBP, JPY, CAD), each weighted by 20%
• EUR Index – Measures the value of the Euro confronting a basket of five global currencies (USD, AUD, GBP, JPY, CAD), each weighted by 20%
• GBP Alphabetize – Measures the value of the British Pound confronting a basket of five global currencies (USD, EUR, AUD, JPY, CAD), each weighted past 20%
• USD Index – Measures the value of the Us dollar against a basket of five global currencies (EUR, GBP, JPY, CAD, AUD), each weighted by xx%

Stock Indices

Enjoy exciting opportunities to merchandise stock indices with the do good of real-time charts and pricing.

Our stock indices are sourced from the over-the-counter (OTC) marketplace – sources outside of the centralised exchanges. Please note that due to their OTC nature, the prices of our stock indices may differ from their counterparts on centralised exchanges.

Commodities

We offer all iv precious metals – gold, silver, palladium, and platinum – as well as energy in our list of bolt.

Constructed Indices

Binary.com’due south Constructed Indices are synthetic indices that mimic real-world market volatility and are bachelor for trading 24/7. They are based on a cryptographically secure random number generator audited for fairness by an independent third party.

Synthetic Indices requite you exclusive access to various trade types, such as Up/Down, Touch on/No Touch on, In/Out, Asians, Digits, Lookbacks, Reset Call/Reset Put, Telephone call Spread/Put Spread, But Ups/Only Downs, and more.

Synthetic Indices are further categorised into two classes:

• Continuous Indices – Choose from the Volatility 10 (1s) Index, Volatility 25 (1s) Index, Volatility 50 (1s) Index, Volatility 75 (1s) Alphabetize, Volatility 100 (1s) Index, Volatility x Index, Volatility 25 Alphabetize, Volatility 50 Alphabetize, Volatility 75 Index, and Volatility 100 Index. These indices correspond to imitation markets with constant volatilities of ten%, 25%, 50%, 75%, and 100% respectively.
• Daily Reset Indices – Daily Reset Indices replicate markets with a bullish and bearish tendency with a constant volatility. The Bull Marketplace and Deport Market indices starting time at 00:00 GMT each day, replicating bullish and bearish markets respectively.

Glossary

Barrier(s)

The barrier of a binary option merchandise is the toll target you gear up for the underlying. You tin choose trades that stay below or go above a toll target, or stay betwixt ii targets.

Binary option

A binary option is a contract purchased by a trader, which pays a pre-determined amount if their prediction is right.

Commodities

Commodities are resources that are grown or extracted from the footing, such as silver, gold and oil. On Binary.com, they are priced in U.s.a. dollars.

Contract period

The contract period is the timeframe of a trade. It is also called the duration.

Derivative

A derivative is a financial instrument whose value is determined by reference to an underlying market place. Derivatives are commonly traded in the inter-bank market, and binaries are i of the simplest forms of derivatives.

Duration

The elapsing is the length of a purchased trade (see ‘contract period’).

Ends Between/Ends Exterior trades

An Ends Between trade pays out if the market exit cost is strictly higher than the low price target AND strictly lower than the high toll target. An Ends Outside binary pays out if the market exit price is EITHER strictly higher than the high price target OR strictly lower than the low price target.

Entry spot toll

The entry spot price is the starting toll of the trade purchased by a trader.

Decease price

The expiry price is the cost of the underlying when the contract expires.

Forex

In strange exchange markets, traders tin can enter contracts based on the change in price of one currency as it relates to some other currency. For case if a trader selects Rise in the EUR/USD market place, they are predicting that the value of the Euro will rise in relation to the value of the United states dollar.

GMT

GMT stands for Greenwich Mean Time, the official time used in the UK during wintertime. In summertime, the UK changes to British Summertime Time, which is GMT + i hr. All times on the Binary.com site use GMT all year round.

Higher/Lower trades

These are trades where the trader predicts if a marketplace will stop higher or lower than a specified price target.

Stock Indices

Stock market indices measure out the value of a selection of companies in the stock market.

In/Out trades

These are trades where the trader selects a low and high barrier, and predicts if the market place volition stay within these barriers or get exterior them (see also ‘Stays Between/Goes Outside trades’).

Market exit price

The market get out price is the price in consequence at the terminate of the contract flow.

No Bear on trades

These are trades where the trader selects a price target, and predicts that the market volition never touch the target earlier the expiry of the trade.

(Ane) Touch trades

These are trades where the trader selects a toll target, and predicts that the market will bear upon the target before the decease of the trade.

Payout

The payout is the amount paid to an options trader if their prediction is correct.

Pip

Pip stands for ‘per centum in signal’ which is mostly the quaternary decimal place (i.e. 0.0001).

Profit

The profit is the difference between the purchase price (the stake) and the payout on a winning trade.

Constructed Indices

The synthetic indices simulate various existent market situations and provide an ideal platform for getting used to trading and testing strategies under various market place conditions. These indices depend on volatility and drift, and help users to endeavor out scenarios similar – high volatility, low volatility, bullish and bearish trends.

Resale cost

The resale price indicates a contract’s current market cost. Resale prices are on a best-efforts ground and may not be bachelor at all times afterward purchase. See ‘Sell choice’ for more details on selling contracts before decease.

Return

The return is the money realized when the contract expires (see ‘Payout’).

Rising/Fall trades

These are trades where the trader predicts if a market will ascent or autumn at the end of a selected time period.

Sell option

Information technology is sometimes possible to sell an pick before the expiry of a trade, but only if a fair price tin can be determined. If this option is bachelor, you will see a ‘Sell’ button inside the popup window, after clicking on the ‘View’ push button adjacent to your trade in the portfolio.

Spot cost

This is the current price at which an underlying tin be bought or sold at a detail time.

Stake

The stake is the amount that a trader must pay to enter into a trade.

Stays Between/Goes Outside trades

A Stays Betwixt merchandise pays out if the market stays between (does not touch) BOTH the high barrier or the depression barrier at whatsoever time during the period chosen by a trader. A Goes Exterior trade pays out if the market touches EITHER the loftier bulwark or the low barrier at whatsoever time during the period called past a trader.

Tick

A tick is the minimum upward or downwards movement in the price of a market.

Underlying

Each binary choice is a prediction on the future movement of an underlying market place.