Lately, such theme as binary options trading became very popular among brokers that offer services on Forex market. Another name for these options is- “all or nothing”. In other words, you buy a contract on some financial event which might either happen or not within a certain period of time that is called expiration time. In case if you win, you get commission, otherwise you lose the invested in a trade money.
Buying and selling such options makes a basis and foundation of a financial betting strategy. Basically, financial betting is very similar to a bookmaker or betting activity. The only distinction is that bookmaker’s office accepts bets on a result of some sport event and in case of financial betting, bets are accepted on some financial result.
Many dealing companies started developing binary options trading instead of some other instruments of a financial market. Yet now it is only simple binary options – Call (buy) and Put (sell).
Their idea is the following: a trader takes any currency pair, sets a certain time frame and has only two conditions: more or less. So to say, if you are predicting that the cost of this currency pair will rise in two hours, you buy binary option for increasing for $10. If in two hours your prediction comes true, you receive your $10 back plus additional $8 profit. But if your prediction doesn’t work, then you lose $10.
There are companies the main activity of which is financial betting. These companies offer a wide range of betting strategies along with binary options.
- First of all, binary options of these companies have a pretty wide time gradation starting from 5 minutes and finishing with 362 days (one year);
- Second of all, is the variety of financial instruments that can be betted on. This is Forex, different indexes and assets, shares of an American market and other instruments on other markets;
- Third, except the above-mentioned options (increase or decrease), these companies also offer progress / achievement options the level of which was set in advance. These are so-called Touch and No-Touch options.
Then, there are options trading which, the price on the instrument should be either higher or lower within a certain period of time. These are called High / Low options.
And finally, there are options trading which, the price on the instrument should stay inside or go through the limits of a diapason within a certain period of time – Inside / Outside options.