Binary options trading definition explained for beginners, Fining out what is binary options trading robots and how to open binary option trading account with regulated binary options platforms.
Binary Options Trading Definition
Binary options are based on a simple ‘yes’ or ‘no’ proposition: Will an underlying asset be above a certain price at a certain time? Trades place wagers as to whether that will or will not happen. If a customer believes the price of a commodity or currency will be above a certain price at a set time, he buys the binary option. If he believes it will be below that price, he sells the option. The price of a binary is always under $100.
“ForexSQ” described the binary options trading process in the U.S. thusly:
binary may be trading at $42.50 (bid) and $44.50 (offer) at 1 p.m. If you buy the binary option right then you will pay $44.50, if you decide to sell right then you’ll sell at $42.50.
Let’s assume you decide to buy at $44.50. If at 1:30 p.m. the price of gold is above $1,250, your option expires and it becomes worth $100. You make a profit of $100 – $44.50 = $55.50 (less fees). This is called being “in the money.”
But if the price of gold is below $1,250 at 1:30 p.m., the option expires at $0. Therefore you lose the $44.50 invested. This called “out of the money.”
The bid and offer fluctuate until the option expires. You can close your position at any time before expiry to lock in a profit or a reduce a loss (compared to letting it expire out of the money).
Every option settles at $100 or $0, $100 if the bet is correct, 0 if it is not.
On non-regulated platforms, client money is not necessarily kept in a trust account, as required by government financial regulation, and transactions are not monitored by third parties in order to ensure fair play.
Binary Options Brokers Regulation
Many “binary option brokers” have been exposed as questionable operations. In those cases, there is no real brokerage; the customer is betting against the broker, who is acting as a bucket shop. Manipulation of price data to cause customers to lose is common. Withdrawals are regularly stalled or refused by such operations; if a client has good reason to expect a payment, the operator will simply stop taking their phone calls. Though binary options sometimes trade on regulated exchange, they are generally unregulated, trading on the Internet, and prone to fraud.
How to open Binary Option Trading account
To do open binary option trading account you need to open demo account with Binary Option brokers and download online trading platforms, Then you can trade online with your mobile or desktop computer, To get daily binary option trading robots and forex News you can use “ForexSQ.com” website, We use Wikipedia as source.
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