Binary Option Trade has revolutionized the way digital binary options are traded on the internet today, by supplying our visitors with recommendations for simple, exciting, dynamic and highly profitable trading platforms, very different from traditional option trading.
Digital Binary Options allow you to gain up to 75% on your investment within an hour when the option expires “In The Money” A binary option is an option type that at expiration either pays off a fixed amount or nothing at all. Let’s say XYZ is trading at 95 and the 100 binary call option is offered at $2 with a fixed payoff of $10 if the stock closes above the 100 strike. Below 100 at expiration you lose your entire $2 and above 100 at expiration you make $10. Simple. One or the other. The option pricing model is merely the odds of whether XYZ will close above the 100 strike or not.
Binary call and put options are popular in the platinum market, struck on the mid-market price of the metal of a certain quality, quoted by several dealers over a stated time period. Platinum trades in large varying quantities among major producers and manufacturers, as well as between speculators and dealers.
Digital Binary Options are cash-settled, European-style options. If at expiration, the option settles in-the-money, the buyer or seller of an option receives a pre-specified dollar amount. Similarly, if the option settles out-of-the-money, the buyer or seller of the option receives nothing. This provides a known upside (gain) or downside (loss) risk assessment, and unlike traditional options, Digital Binary Options provide full payout with even a single pip of movement.
In the United States, there are a few places where Digital Binary Options can be traded. The Chicago Board of Trade (CBOT) offers Digital Binary Options trading on the Target Fed Funds Rate. To trade these contracts, digital binary option traders must be members of the exchange or investors are required to trade through such members to execute a trade – the value of each contract is $1000. The other exchange that offers trading on Digital Binary Options is the HedgeStreet Exchange. Similar to the CBOT and NYMEX.
A trader of Digital Binary Options needs to anticipate the expected direction of the price movement of the underlying asset. Unlike traditional options, knowing the direction of the price movement, as well as magnitude of the movement, is not required. If the investor has an opinion about an underlying asset and wants to place a trade, s/he can trade Digital Binary Options.
Who Needs Binary Option Trading?
Binary option trading is such a recent invention in the markets, that many digital binary option traders do not realize just how they could use it to good effect. In case you don’t know, digital binary options get their name because the result is “binary”, simply yes or no. The option is either above or below the price of a financial security at the expiration date and time, and you either get paid or you don’t. If you have a binary call option and the price at expiration is more than your strike price, then you profit by a set amount, usually $100 or $1000 depending on the market and your initial investment. If the price is less, you get nothing, unless you trade with eztrader, in which case you are still left with 5%.
You can also buy a binary put option, which works in the opposite way. Because they are so simple, requiring only a sense of direction of the price, they are easy to trade and the risk/reward ratio is predetermined when you buy the contract. Thus digital binary option traders are turning to digital binary options to simplify their choices while giving them the chance of good profits.
