How to Trade Binary Options

Binary Options, also known as Digital Options, all-or-nothing options, or Fixed Return Options (FRO'S).

The Binary Option is in essence nothing more than a prediction on which way the price of a stock, commodity, index, or a foreign currency will move by a designated expiration time.

When predicted correctly, the trade is considered "in the money", and the trader will receive the fixed return on his investment.

If the prediction was incorrect, then the trade is considered to be "out of the money" and the trader will lose the amount agreed upon placing the option.

Binary options, or digital options, are options that pay a pre-determined, fixed amount, depending on whether or not a event occurs at the time the option expires. Like traditional options, binary options are based on an underlying asset. For example, you speculate $100 that the gold price will be higher than the current price in one hour from now with a payout of 75%. If you are correct, you will receive $175 (i.e. $100 investment plus 75% profit). On the other hand, if in one hour from now the gold price is lower than the current price, you will lose 90% of your invested amount.

What are the benefits of trading Binary Options with OptionsNow?

Trading binary options with OptionsNow offers several benefits for traders:

Easy to understand – Binary options are simpler to understand than other types of instruments since you only need a sense of direction, e.g. ‘Will the AUD/USD go up or down’ and are not concerned with the magnitude of the move.

Commission free – There are no brokerage fees or commissions.

How do I get started?

You can register online in just a few minutes. To sign up:

•          Click on the Open Account link on the top of the home page.
•          Fill in the requested details.
•          You will receive a confirmation e-mail at the e-mail address you entered during registration.
•          Log in to http://www.optionsnow.com/
•          Start Trading!

How do I trade?

Trading binary options on OptionsNow is very easy. After logging in, follow these simple steps:

Select an Asset (most left on the tab menu) and select the market you’d like to trade. You can find the fixed payout for each option displayed on the right side under the expiry time.

Choose the direction: either CALL (Above) or PUT (Below)

• Regardless of the asset, investors can select to take a short position in a binary options environment. A binary PUT option, also known as a digital PUT option, is a trading strategy used by investors when they believe that the price will fall below the strike price upon expiration. This option is the opposite strategy to that of a Call option.

• Typically a binary PUT option is used as a strategy in bearish markets, when market prices are falling and consumers are pessimistic about market performance. However, even when times are positive, bullish markets can still experience falling prices and therefore a digital PUT option can be applied in this instance too.

   Select the amount to invest

           After placing the investment  amount you can immediately see the Payout for both scenarios:

·         Above rate- which in the case of a Call option signifies that the option will be in-the-money if the rate will be higher  than the strike price at expiry time.

·         Below rate –depending on the asset it can have a return value of 10% from the invested amount.

    Click ‘Apply to execute your trade.

Note: OptionsNow offers traders the possibility to cancel a trade within a period of 2 seconds after the trade is placed. If the trader noticed that he can obtain a better “strike price” he can use this unique tool provided by our platform.

What is a Call Binary Option?

A ‘binary call option’ is a contract that rewards

the holder of the option if the price underlying

asset is above the strike price at expiration.

What is a Put Binary Option?

A  ’binary put option’ is a contract that rewards

the holder  of the option if the price underlying

asset  is  below  the  strike price  at  expiration.

Note: The blue line signifies the strike price. Depending on the type of options Call/Put it will describe the evolution of the price rate and will make it easier to understand whether the option will expire in the money or not.

What is the ’strike price’?

The strike price is the price of the underlying market when the binary option is purchased.

What is the ‘expiry price’?

The expiry price is the price of the underlying market at the time of expiry of the binary option.

What is ‘in-the-money’ expiry?

A term to describe a successful option trade, i.e. when the expiry price of the underlying market is above the strike price for a call binary option and below the strike price for a put binary option.

Both aforementioned graphs indicate an in-the-money expiry rate since both are illustrated in green.

What is ‘out-of-the-money’ expiry?

A term to describe a failed option trade, i.e. when the expiry price of the underlying market is below the strike price for a call binary option and above the strike price for a put binary option.