Investing In Binary Options

Binary options are relatively new investment instruments, which differ substantially from traditional known as vanilla options.

Let's review the characteristics of vanilla options, remembering that when you buy a call option (call) or sell (put), which is acquiring the right (not obligation) by paying a premium, to buy or sell a particular instrument at a fixed price at a future date well defined, in which that right will expire.

Call option - the right to buy an underlying asset at a specified price at a definite moment in the future. The more the market is rising on the day of maturity, the greater benefit to the holder of the option, as long as the price at maturity exceeds the exercise price of the option. In case, the expiration date, the market price is below the level of implementation, the holder will get a loss for the full value of the fee (premium).

Put option - the right to sell an underlying asset at a specified price at a definite moment in the future. The further down the market on the day of maturity, the greater benefit to the holder of the option, as long as the price at maturity is below the exercise price of the option. In case, the adjustment date, the market price is above the strike price, the holder obtains a loss for the full value of the fee (premium).

Binary Options have special characteristics which make them highly attractive to investors because the operation of them is very simple, they are known as "all or nothing options" for the binary nature of it is say yes to predict what the behavior of a particular asset. No need to buy the shares, or deal with coins.

It is a simple and effective way of investing in financial markets with a small budget and basic skills for trade, which also benefits the most experienced investor. Trading binary options is a matter of conjecture that is, more or less the price of the underlying asset at a given time in the future be higher or lower than its current price, known as the strike price.

To negotiate binary options, the investor must select the underlying asset, expiration time and the direction in which it is thought that the asset will move. The underlying asset is the option derives its value and could be an index (eg, Nasdaq), commodities (eg oil) currency pair is also known as currency (eg EUR / USD) or actions (eg, Apple, Coca Cola, Google, etc.) are free trading platforms that offer more than 100 products.

The expiration time business dictates binary option when the contract ends and can be the end of the next hour or at the end of the day, week or month. The investor must take into account the direction that he believes that the asset will move.

If he thinks it will go up, then going to buy a call option. If he thinks he is going down and then buy a put option. One option is considered "in-the-money" if they win over the exercise price of an option or below it in a sale.

One option is considered "out-of-the-money" if it expires below the exercise price of an option or above it in a put option. When you trade binary options, profits from 65-71% for options that expire "in-the-money" even a 15% refund for those who overcome "out-of-the-money".

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