Binary option
What is Binary Option?
What is Binary Option?
A binary option is a fixed return option, as there are only two possible outcomes that are fully realized at the beginning of the contract.
Thus, the binary option is a contract that gives the buyer or investor, the opportunity to gain a winning result on the variation of an underlying asset at a fixed price within a specified period of time . This time the it is you who choose!
Traded products known considered underlying assets are among others:
- Currencies (eg USD / JPY)
- Raw materials (oil, gold)
- Stocks (eg Microsoft, Coca-Cola)
- Indices (eg, Nasdaq, FTSE 100)
During the negotiation of binary options, the buyer determines himself whether he thinks that the exchange rate will be increased or, conversely, decreasing and that in a given time: one hour, at the end of the week or of the month.
The fixed price at which the owner buys is given based on the current market.
Indeed, you, the investor's option, if you think that at expiration of the option, it will be higher than current prices, you simply place an option sales.
The only unknown is whether the asset expires in a higher or lower compared to the current price.
If the binary option expires "in-the-money", then the buyer will get a profit of between 65% and 71% of the amount of investment.
If a binary option expires "out-of-the-money" with a "anyoption ™", the buyer will receive a 15% return on its investment.
The certainty of negotiations binary options makes it a preferred method for many investors as not only the potential gain is known, but also the potential loss is fixed.
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