Binary Options FAQ

Binary Options FAQ

Binary-computingThe FAQ (Frequently Asked Questions, FAQs) we want to answer in general for binary options in this amount once. The background: Over and over again we read in forums that interested traders with the approach can not do much in itself. Therefore, here are once explains the basics of this interesting investment vehicle.

What are Binary Options?
Binary options are a highly simplified financial products derived from traditional stock options. Binary options are one of the transactions and are highly speculative. There is speculation on the price development of the binary option underlying asset If respective or falls this within a period of 30 seconds up to 10 months.

What is the risk include binary options?
Binary Options are forward contracts and thus highly speculative. The risk is very high, since price forecasts associated in the future with great uncertainty.

Are binary options money applying for?
Binary options are not suitable for investment because of the high risk. There are speculative transactions with great opportunities.

How do binary options?
are according to your name this exotic options built “binary”, they can thus only two possibilities: The trader wins or loses each a fixed amount. This basic principle is different from all other trading instruments from other flowing risk management. Nevertheless, the broker for Binary options have created many technical ways to differentiate trade very far. This begins with the underlying assets from the asset classes of stocks, commodities, indices and futures, and continues through various types of options through to Mailout Binary Options by Option Builder continues.

What types of options are there?

Binary options are a simple call and put options on rising or falling prices available further as touch options where the price has to touch a certain price threshold, as range options, in which end the course in a certain range must, as a Pair options – comparison of two values – and as Ladder options (procyclical spiking). For each of these options for different time periods are available. The shortest of these periods of time ranging between 30 to 120 seconds is usually as an extra option ( “After 60 sec”) designated by the brokers. But it is structurally only ultra short-dated call and put options. The same goes for “Pair” and “Ladder”, actually there are varieties of call and put options. Not to mention the additional features in binary options: trader can use “Early Closure” include an option to protect a profit before time (under a certain income foregone), they can double up with “Double Up” their use or lengthen with “rollover” the term.

What gains and losses are possible?

With binary options profits of around 80% for simple call and put options are possible. Each broker put these gains vary firmly between about 75 to 90 percent. In the highly speculative touch options the broker profits pour in the form of so-called high yield bonds. These are super-profits of several hundred percent, up to 700% range in extreme cases. Important to know: The gains offered are indeed at the beginning of the term of the option always recognizable, but they vary. The broker determines depending on the found on market volatility. The gains also entail a potential loss to be able to reach only 20% loss of total loss. Some brokers refund us back, in other cases, a loss of refund between 10 to 15 percent is granted. Higher loss reimbursements up to 80% of the original capital invested (= 20% loss) result from the use of an option Builders. With this tool, the trader creates his Binary option itself and also defines his risk. If he crucial for a very high loss of refund, the profit is correspondingly much lower.