How does Binary options trading work?

Question

can someone tell me how Binary options trading works? What do you do how can you tell what the markets are going to do. Whats a good thing to invest in ? how do you make money from it?

Answer 1

Binary options are not investing, just betting at terrible odds. The only ones making money are the thieves running the sites.



The odds are totally stacked against you. Worse than any casino. Earlier someone asked about a firm paying 70% on winners. Here's how the math works in that example.



Win: 70%

Lose: 100%

Expected value of each trade: (70 - 100 ) / 2 = -15%



A legit options broker would be registered on appropriate government sites.



US: Check CFTC and SEC sites

UK: See FSA site



Expect a couple of spam posts about Banc de Binary. Very widely promoted, but on a warning list from the SEC. Link below.



You should also avoid sites based in obscure locations to avoid consumer protection laws. Ex: anyoption is based in Cyprus, the financial scam capital of the eurozone.

Answer 2

A binary option is a contract between two parties in which one party (the buyer) pays the other party (the seller) and in return the seller will pay the buyer a fixed amount of money (or some other asset) if a specified event happens. The event can be anything, but with financial products it is usually based on the price of some security or index at some point in time in the future. Some examples:



Will the Dow Jones Industrial Average be above 15,000 when the market closes on June 30, 2013?



In ten minutes will the price of Apple stock be higher than it is right now?



In all cases it must possible to answer the question with an answer of yes or no. The terms of the contract must give an unambiguous way that the question will be answered.



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I have seen two primary types of binary options. One type is a private company that sells the binary options for a fixed price to the public. For example, they may charge you $10 per option and pay you $17 if the event occurs. These sites almost always have very short term options, Buying options at these sites is similar to placing a bet in a casino, except that your expected return from a casino is usually much better.



The other type is an exchange traded option where the price is determined by the market. Both the buyer and the seller are investors or speculators. With these options you will normally see a much fairer price and an expected return much better than most casino bets. These options are generally longer term options when they are issued. It is also possible for an investor to close a position before the settlement date. These options can be used as part of an intelligent investment strategy, but it is still possible to use them strictly as a betting strategy.



You can get a lot more information on binary options from



http://en.wikipedia.org/wiki/Binary_option

Answer 3

How Binary Trading Works

Answer 4

1

Answer 5

How Binary Options Work

Answer 6

2

Answer 7

I'm pretty sure none of the people who have commented on your questions to this point have ever even "traded" binary options. They immediately see something different than the stock market and right away the whole thing is a scam.



To answer your question, from experience, binary options are essentially fixed agreements. You make an "investment" in a certain event occurring. For example, at 1pm will the EUR/USD be trading above or below the current level (or some prefixed level). You as the investor than decide whether it will be higher or lower. If you say higher and the EUR/USD is infact higher @ 1pm, you will receive the agreed upon amount, regardless of how much the EUR/USD is over the agreed upon price. It could be 0.001 over or 0.1, it doesn't matter. If however you are incorrect, you will lose your whole investment, again regardless of how much the price has changed.



As can clearly be seen, there will be winners and losers and that all depends on your skill at recognizing short term trends. Because you are the one making the decision, you are equally likely to pick a winner as you are a loser. You know what the payoff is going into the trade and some binary options sites even allow you to close your position before the prescribed period at a discount to the original investment (or if you are ahead, at a premium).



I'd be happy to talk to you more in depth about this, feel free to send a message!

Answer 8

If you are a beginner or if you are not well knowledgeable in Binary Options I would definitely say "It's not gonna work for you"



You should learn basic things about Binary trading and there are a lot of blogs for Binary Option where you can find trusted brokers, strategies and so on. Make sure you have learned everything about Binary Option before trying out.



Binary Options are cash-settled as European-style options, meaning they can only be exercised on the expiration date. If, at expiration, the options settle in-the-money, the buyer or seller of the options receives a pre-specified dollar amount. Similarly, if the options settle out-of-the-money, the buyer or seller of the options receives nothing. This provides a known upside (gain) or downside (loss) risk assessment. Unlike traditional options, Binary Options provide full payout due to a single pip movement.



hope that make sense.

Answer 9

Binary options trading is about predicting whether the price of an asset will go or go down. You don;t need to have really detailed knowledge of the markets just an interest in stocks and shares. Find a stock that you like and follow how it's performing for a while, when you feel that you can see a trend or a pattern then you can make a prediction. How much you make depends on how much you invest - i have an article here on getting strated with binary options trading here is you need more info - http://www.binary-bonuses.com/about/



Let me know how you get on!

Answer 10

Well, binary is either 0 or 1, yes or no, on or off, black or white. There is no in between. When you trade options , shares, futures etc. etc. you gain or lose an amount of money calculated on how much the instrument moves from your purchase point.

You can compare it with a horse race. Binary is your horse wins or loses. Non-binary is your horse wins by a number of lengths. The more lengths, the more you win.

Is it worth doing?

Well firstly, like all investing/trading, you have to get the underlying movement correct in your alloted timescale. To win on shares you have to find ones that go up. From this you can derive any type of bet, investment that you like but at the end off the day you have to get that simple fact correct.

Answer 11

3

Answer 12

This is the ONE of riskiest trading. In business world is not even called trading, its simply gambling. Its YES or NO, nothing between, mostly is NO! If you like casino, its good choice for you. If you want to be rich, do another trading. Stocks, commodities, index, forex, etc.



Leave this "trading" for fools and do something serious!

Maybe you watched some videos of this how to make a big money with this, but its only scam and fooling people!



Good luck.

Answer 13

Binary options is the name of the new scam.

Old forex scammers started noticing that people were catching on to the forex scam.



So... they changed their scams to a new name called

Binary Options.