Binary Options Strategy Guides

Before you start  trading binary options you should learn as much as you can about the subject. This section of the site gives you a full strategy guide to learn the basics and  the  more advanced binary options trading techniques.

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Binary Options Strategy Guide – Lesson 1

This guide is the definitive guide to binary options strategy. New financial products are constantly appearing in the market. Some of these actually represent an improvement over those which are in existence already. Others have faded away on their own accord due to their unsuitability in the current market environment. However, off late, one financial innovation that has been gathering a lot of interest within the financial sector is Binary Options.

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Pricing Dynamics of Binary Options – Lesson 2

With everything being equal, generally, out of the money binary options are cheaper to buy than traditional out of the money options. This is due to the fact that the payouts for binary options are fixed when they expire in the money. Traditional options on the other hand, theoretically have an infinite payout amount. They also normally have greater “time value” than that of binary options.

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Binary Options Trading Strategy Basics – Lesson 3

With binary options trading, an investor is able to know beforehand what is his potential gain or loss before he invests his money. In fact, he generally has two possible outcomes for his investments:

  1. If the binary option expires in the money, he will receive a fixed predetermined payment between 60% to 80% return on his investment depending on the underlying asset that he is investing in.
  2. If the binary option expires out of the money, he will not receive anything in return for his investments.
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Carrying Out a Binary Option Trade – Lesson 4

To execute the trades, investors can use an online binary trading platforms such as  Anyoption , Binarix Trading , Trader XP and EZtrader which are 100% web based and can be used by beginners and more advanced traders . The process of using an online binary trading platform in carrying out a  trade is as follows:

  • Select the underlying asset like a currency pair  to be traded with like the GBP/JPY or USD/EUR , you can also
    choose other assets like stocks , commodities  and indices .
  • Select the investment amount that you want to invest with your trade .
  • Decide the direction of the price movement so you will be able to know whether to buy a Call option or Put option.
  • Select the expiration Time you wish for the option you choose to buy a put or call for
  • Execute your trade
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The Disadvantages of Binary Option Trading – Lesson 5

Although binary options have their respective advantages, they are not without any cons. The following below are some of the considerations that investors need to bear in mind before venturing into binary option trading.

  • High “Spread”

Binary options are in fact some of the most expensive financial instruments around in the market for retail investors. In some cases, the bid /ask spread can be as high as 40% for some underlying assets. The effect of this is that you have to be in the money most of the time in order to offset the high spread before you can return a profit overall.

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