Binary options

A clear guide to understanding all about binary option trading

anyoption™’s binary options are an exciting new type of investment. Rather than purchasing the asset itself, investors can speculate on which direction they estimate an asset will move in. When a binary option is purchased on our platform, a contract is created which gives the buyer (known here as the investor) the right to buy an underlying asset at a fixed price, within a specified time frame with us, the seller.

Binaries are also known as all-or-nothing options, digital options, or Fixed Return Options (FROs), each name stressing the 0-1 nature of the options. This is because there are two possible outcomes to a binary option, both of which are understood by the investor prior to purchasing the option.

A binary option trade on the anyoption™ platform may look something like this:
An investor purchases a Microsoft binary option for $100, with the opinion that at the end of the day Microsoft’s shares will be higher than they currently stand. If he is correct then we offer a 71% return on his investment.

Binary option outcome:
1 - If at the end of the day, Microsoft is indeed higher than at the time the option was purchased, then we will pay the investor a $171 payout
0 - Should the shares be lower, then we will refund the investor $15

This means that when the contract is purchased, the investor knows that he will receive either $171 or $15. These values will obviously be much greater, the larger the investment. An anyoption™ investment of $1,000 with a 71% payout will result in a $1,710 payout or a $150 refund.

What is unique about trading binary options?
There are three major differences between binary options and regular (known as vanilla) options:

chart_vanilla.gif

These differences have several consequences:
1 The short term multiple expiry times means investors can make an instant profit on their binary options and are more flexible in their option investments

2 In vanilla options, an investor pays per contract (i.e. point). Subsequently the investor will profit or lose an amount depending on the number of points difference between the expiry level and the strike price. Unlike in binary options where the two outcomes are set from the start

3 An investor in a binary option must hold onto his option until the expiry date. He must therefore take more care when purchasing his options as he cannot sell them once they are purchased

Trading binary options on our anyoption™ platform is a novel and interesting method of investing in the financial markets. They are more straightforward and flexible than traditional options but as with all investments, planning ahead is an important part of succeeding.

OUR TRADERS SHARES
Recep K
At 24.04.14 10:20 a 360TL Gümüş PUT binary option paid me 612TL in just 10 minutes
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