Binary options 2016 – What is Binary Options Trading? Sample of Binary Options
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Binary options 2016 – What is Binary Options Trading? – Sample of Binary Options Trading
What are Binary Options?
Binary options are trading options that simply need you to predict one of only two possible directions of the price of a stock, which could either go up or go down. There are also different opening and closing times available to choose from that add another angle to profit while trading. If your forecast is correct, you will earn a fixed amount of money that is agreed upon at the beginning of the trade. If a trader incorrectly predicts the price direction then they will loose their investment. This specific trading style is one of the most profitable types of trading available on the market.
Sample of Binary Options Trading
For example, an investor wants to profit off a binary option prediction that company A’s stock will go at or above on August 30 at 11:00 am at a binary payoff amount of ,000. He then buys 10 binary options from a binary options broker worth 0 each before the given deadline. When the price of company A’s stock is at or above (also called “in the money” in investment terms), the prediction of the investor, then he will earn the payoff amount of ,000 minus the cost of the option, which is 0 x 10 = ,000. This means that the investor will have a net profit of ,000. In case the stock price closed at below (also called “out of the money” in investment terms), then he loses all of his ,000 investment.
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