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456-546-4533
faizanoor noor
These
options can be traded at any time at a rate based on market forces The rate
fluctuates between one and 00 based on the probability of an option finishing
in or out of the money At all times there is full transparency so a trader can
exit with the profit or loss they see on their screen in each moment They can
also enter at any time as the rate fluctuates thus being able to make trades
based on varying risk-to-reward scenarios The maximum gain and loss is still
known if the trader decides to hold until expiry Since these options trade
through an exchange each trade requires a willing buyer and seller The
exchanges make money from an exchange .
fee - to match buyers and sellers - and
not from a binary options trade loser High-Low Binary Option Example Assume
your analysis indicates that the S&P 500 is going to rally for the rest of
the afternoon although you're not sure by how much You decide to buy a (binary)
call option on the S&P 500 index Suppose the index is currently at 800 so
by buying a call option you're wagering the price at expiry will be above 800
Since binary options are available on all sorts of time frames - from minutes
to months away - you choose an expiry time (or date) that aligns with your
analysis You choose an option with a 800 strike price that expires 30 minutes
from now The option pays you 70% if the S&P 500 is above 800 at expiry (30
minutes from now); if the S&P 500 is below 800 in 30 minutes you'll lose
your investment You can invest almost any amount although this will vary from
broker to broker Often there is a minimum such as $0 and a maximum such as $0000
(check with the broker for specific investment amounts) Continuing with the
example you invest $00 in the call that expires in 30 minutes The S&P 500
price at expiry determines whether you make or lose money The price at expiry
may be the last quoted price or the (bid ask)/ Each broker specifies their own
expiry price rules In this case assume the last quote on the S&P 500 before
expiry was 80 Therefore you make a $70 profit (or 70% of $00) and maintain your
original $00 investment Had the price finished below 800 you would lose your $00
investment If the price had expired exactly on the strike price it is common
for the trader to receive her/his money back with no profit or loss although
each broker may have different rules as it is an over-the-counter (OTC) market
The broker transfers profits and losses into and out of the trader's account
automatically Other Types of Binary Options The example above is for a typical
high-low binary option - the most common type of binary option - outside the US
International brokers will typically offer several other types of binaries as
well These include "one touch" ..
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