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Binary Options Guide

This section contains everything you need to know about binary options trading through a detailed guide .

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 technique

Start the course- Binary options trading- how and what?

Binary Options Strategy Guide – Lesson 1

This easy to read course is the Binary Options Strategy Guide. We’re glad you popped by. Let’s get the basics straightened out in this course. As you would have seen 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 snowball of interest within the financial sector is Binary Options.

Pricing Dynamics of Binary Options vs Traditional 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.

How to Value Pricing Dynamics

This valuation difference between traditional out of the money options and binary options allow for:

• The assumption of a quantifiable risk by the option seller.

• For the buyer, he is able to obtain greater leverage for his capital as the premium investment is much lower.

Binary Options Trading Strategy Basics – Lesson 3

With a simple binary options trading strategy, an investor is able to know beforehand what is his potential gain or loss will be   Its not limitless as is the case with forex trading. 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.

Carrying Out a Binary Option Trade – Lesson 4

To execute a binary option trade, investors can use  online binary trading platforms such as  Anyoption, iOption and 24optionwhich 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 EUR/USD , you can also
  choose other assets like stocks like Apple and Google, commodities like Gold and Crude Oil  and indices like the FTSE 100 and NASDAQ .
• Select the investment amount that you want to invest with your trade . Also know the minimum deposit required by the broker. Usually $100-$200.
• Decide the direction of the price movement so you will be able to know whether to buy a Call option or Put option. If you believe the asset will go up by the expiry period select up and vice versa.
• Select the expiration Time you wish for the option you choose to buy a put or call for
• Execute your trade by clicking Trade

The Disadvantages of Binary Option Trading – Lesson 5

Although binary options have many advantages, they are not without their disadvantages too, like all risky and rewarding things in life. The following  are some of the considerations that investors need to bear in mind before venturing into the world of binary option trading.

• High “Spread”

Binary options are in fact some of the most expensive financial instruments  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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