What is a binary option?
The binary option is an investment vehicle with only two results - either a certain amount will be paid to the investor if this option reaches a certain level or nothing if it does. Unlike the common option that gives the investor the right to buy or sell an asset at a certain price, the binary option is like a bet that the asset will reach a certain price on a particular date. If the asset reaches this price at the date of the strike, the investor is paid the amount specified in the Option Agreement; If not, the investor has nothing. Such trading on the stock market is unusual, but many people earn large amounts of income through this type of investment.
There are two main types of binary options: cash or nothing or nothing or not. In the binary cash option or nothing, the investor receives a fixed amount of cash if the asset-shares-delay the strike price. The payment of binary options with an asset or nothing is equal to the value of the asset price. When the ass reaches a strike price, it is called “in moneyís ”.
If the investor buys, for example, binary call options or nothing, such as binary call options A, with a strike price of $ 25 (USD) and a $ 400 payout, would get cash if the asset at the date of strike or higher than $ 25. However, if the value of the company and does not reach this benchmark 25 USD, also known as "money", then it will not get anything. In some cases, the investor will be able to restore up to 5% "investment", but usually all related assets will be forfeited when they lose binary options.
The binary option is often called "option all-or nothing" because the investor either gets a full amount or nothing at all. There are also other ways to use a binary option on the market. Some contracts instead of paying will allow the parties to be purchased by assets for reducing the price. These may be quite profitable to sell to others who are willing to pay a much higher market price.
binary mThe worst nightmare of the investor that would leave him with an empty hand if the asset does not reach the expected price. However, if the market changes in favor of the investor, it will often be well rewarded. Binal options can usually be sold again at a brand before the strike date and remove part of this type of exotic options.